Wed 14 Mar 2018, 09:11 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed down $0.31 last night to $64.64, WTI closed at $60.71, down 0.65. Yesterday's Brent market was very wibbly wobbly (fantastic English phrase) with a low of $64.05 and a high of $65.68 - with people quickly crying into their desk, or swearing to themselves. And it kind of makes sense. The market is about as interesting as listening to the shipping forecast on BBC Radio 4, while eating dry toast, and leafing through a text book on the intricacies of the UK tax system. With no real direction, and people taking more of a wait-and-see approach to yesterday's volatility will be welcomed with the same glee as Guardiola will have over Sevilla beating Man Utd last night. What will break us out of this range on Brent, though? Well, as I mentioned yesterday, I think the IEA report tomorrow will be important. There is also the US rig count increasing by 60 since the start of the year, US oil production at 10.369mn bpd as of last week, a near 1mn bpd increase from January where production stood at 9.492mn bpd. Consistent builds on US crude stockpiles, further complication of Venezuelan oil production, the sacking of Rex Tillerson and the implications for U.S. foreign policy (I'm looking at you Iran and North Korea). There are plenty of things to get this market going.

Fuel Oil Market (March 13)

The front crack opened at -9.95, strengthening to -9.90,before weakening to -10.10. The Cal 19 was valued at -14.85

Asia's prompt-month viscosity spread slipped, edging away from a 10-month high hit in the previous session. Tighter blendstock supplies and increased prompt demand from South Korean power producers have contributed to the recent gains in the viscosity spread.

Singapore sold a total of 4.136 million tonnes of marine fuels in February, the highest ever for the shortest month of the year. February sales were 7.5 percent higher than a year earlier but down 10.2 percent from a month ago

However, vessels calling at Singapore for bunkers continued to load larger quantities of fuel with each ship taking on average 1,340 tonnes of fuel in February, well above the average of 1,240 tonnes loaded by vessels in 2017 and slightly higher from the 1,330 tonne average in January.

Economic Data and Events

* 11am: MBA Mortgage Applications

* 11:30am-12pm: OPEC releases Monthly Oil Market Report

* 12:30pm: U.S. PPI Final Demand,. Feb.

* 12:30pm: U.S. Retail Sales Advance, Feb.

* 2pm: U.S. Business Inventories, Jan.

* 2:30pm: EIA weekly oil inventory report

Singapore 380 cSt

Apr18 - 358.25 / 360.25

May18 - 357.25 / 359.25

Jun18 - 356.25 / 358.25

Jul18 - 354.50 / 356.50

Aug18 - 352.75 / 354.75

Sep18 - 351.00 / 353

Q2-18 - 357.25 / 359.25

Q3-18 - 352.75 / 354.75

Q4-18 - 346.00 / 348.50

Q1-19 - 337.25 / 339.75

CAL19 - 312.25 / 316.25

CAL20 - 247.50 / 255.50

Singapore 180 cSt

Apr18 - 366.00 / 368.00

May18 - 365.00 / 367.00

Jun18 - 364.25 / 366.25

Jul18 - 362.75 / 364.75

Aug18 - 361.00 / 363.00

Sep18 - 359.25 / 361.25

Q2-18 - 365.00 / 367.00

Q3-18 - 360.75 / 362.75

Q4-18 - 354.50 / 357.00

Q1-19 - 346.25 / 348.75

CAL19 - 325.50 / 329.50

CAL20 - 271.50 / 279.50

Rotterdam Barges

Apr18 345.50 / 347.50

May18 344.75 / 346.75

Jun18 343.50 / 345.50

Jul18 341.75 / 343.75

Aug18 339.75 / 341.75

Sep18 337.00 / 339.00

Q2-18 344.50 / 346.50

Q3-18 339.50 / 341.50

Q4-18 330.00 / 332.50

Q1-19 322.50 / 325.00

CAL19 291.25 / 295.25

CAL20 236.25 / 244.25


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