Mon 9 Apr 2018, 09:04 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed down $1.22 on Friday to $67.11, WTI closed at $62.06, down $1.48, and INE was closed last Thursday and Friday for the Ching Ming festival. I think Brent will find some support at these kind of levels. $67.50: it's a nice round number and is slap bang in the middle of the 65 - 70 range we have been in all year. The trade war is still going on, quite who will fire the next shot is anyone's guess. I read an interesting article yesterday regarding the correlation between oil demand and the oil price. Quote: "It's not clear whether the global economies will continue to show a negative correlation between oil demand and oil prices from this point onwards, but the research suggests that in the United States, and even in China and India, oil demand is now more sensitive to oil prices than it was a decade or two ago, and that oil producers may be wrong to think that they still hold captive customers who would buy their product at any price". Oh by the way, the rig count in the US was up by 10 - now over 1,000. Just saying.

Fuel Oil Market (April 6)

The front crack opened at -11.25, strengthening to -10.70 across the day. The Cal 19 was valued at -14.50.

Asia's 380 cSt fuel oil cash differential flipped to a premium on Friday following strong buying interest for cargoes of the fuel for a second straight session. The 380 cSt fuel oil cash premiums were at $27 cents a tonne to Singapore quotes on Friday, up from minus $39 cents a tonne in the previous session and minus $82 cents a tonne on Monday.

Trade sources pointed to falling Singapore fuel oil inventories as well as renewed buying interest from Pakistan's state-oil company this week as bullish factors, but some were still puzzled by the abrupt shift in sentiment this week

Fuel oil stocks in the ARA oil hub fell 21 percent, or 222,000 tonnes, from the previous week to a three-week low of 839,000 tonnes in the week ended April 5.

Economic Data and Events

* 1:30pm: Bloomberg forecast of U.S. waterborne LPG exports

* Today, no exact timing:

** Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday's EIA report

** Bloomberg New Energy Finance Future of Energy Summit in New York, day 1 of 2

** BTC Blend loading program for May

Singapore 380 cSt

May18 - 368.00 / 370.00

Jun18 - 367.25 / 369.25

Jul18 - 366.00 / 368.00

Aug18 - 364.25 / 366.25

Sep18 - 362.50 / 364.50

Oct18 - 360.50 / 362.50

Q3-18 - 364.25 / 366.25

Q4-18 - 357.00 / 359.00

Q1-19 - 349.00 / 351.50

Q2-19 - 342.50 / 345.50

CAL19 - 321.25 / 326.25

CAL20 - 262.00 / 270.00

Singapore 180 cSt

May18 - 380.25 / 382.25

Jun18 - 378.50 / 380.50

Jul18 - 377.25 / 379.25

Aug18 - 75.50 / 377.50

Sep18 - 373.75 / 375.75

Oct18 - 371.75 / 373.75

Q3-18 - 375.50 / 377.50

Q4-18 - 368.75 / 370.75

Q1-19 - 360.75 / 363.25

Q2-19 - 354.50 / 357.50

CAL19 - 335.50 / 340.50

CAL20 - 286.00 / 294.00

Rotterdam Barges

May18 356.00 / 358.00

Jun18 355.00 / 357.00

Jul18 353.25 / 355.25

Aug18 351.00 / 353.00

Sep18 348.25 / 350.25

Oct18 - 345.00 / 347.00

Q3-18 350.75 / 352.75

Q4-18 341.25 / 343.25

Q1-19 334.00 / 336.50

Q2-18 325.50 / 328.50

CAL19 302.75 / 307.75

CAL20 253.25 / 261.25


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