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Fri 27 Apr 2018, 08:11 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed up $0.74 last night to $74.74 and WTI closed up $68.19, up $0.14. It's all blissful in the land of the bull. Brent is up another 1% on last week and why not be up here? People seem convinced that the US are going to pull the Iran agreement, and this may disrupt about 350kbpd of production. Wow, 350kbpd of production eh? So the market is rallying to the dizzying heights of $75 per bbl on the back of Iranian sanction, meaning 350kbpd being taken off the market. Well, US exports last week were 2.3mn bpd. In Jan 2017, US exports were 0.746mn bpd. So, if my maths is right, that is an increase in US exports of 1.554mn bpd in available crude in the market since last January. Now let's stay on the maths path - 350kbpd may come off because Iran are sanctioned, but the US are exporting more nets an increase in available oil by 1.2mn bpd compared to Jan last year. So the news about increasing demand has been the market's saving grace. Inventories have been drained and now demand up. The market up here is what it is, I suppose. Have a good weekend.

Fuel Oil Market (April 26)

The front crack opened at -13.30, strengthening to -12.85, before weakening to -13.40, closing -13.30. The Cal 19 was valued at -16.65.

Bullish sentiment continued to support Asia's fuel oil market on Thursday amid ongoing concerns of tight supplies of finished grade bunker fuels and after official data showed Singapore fuel oil stocks dropped to a more than 3-year low

The 380 cSt fuel oil barges crack to Brent crude also narrowed its discount to about minus $12.85 a barrel before the Singapore trading window but later gave up gains to about minus $13.30 a barrel as crude prices climbed.

Singapore weekly onshore fuel oil inventories fell for a fifth straight week to 17.395 million barrels (about 2.596 million tonnes) in the week ended April 25, the lowest since November 2014.

Economic Data and Events: (Times are London.)

* 6pm: Baker Hughes U.S. rig count

* 8:30pm: CFTC Commitment of Traders report

* North Sea Forties, Ekofisk loading plans for June

* Russia Urals final loading plan for June

* EARNINGS: Exxon Mobil, Chevron, Eni, Phillips 66

Singapore 380 cSt

May18 - 399.25 / 401.25

Jun18 - 396.75 / 398.75

Jul18 - 394.25 / 396.25

Aug18 - 391.50 / 393.50

Sep18 - 388.75 / 390.75

Oct18 - 386.00 / 388.00

Q3-18 - 391.50 / 393.50

Q4-18 - 383.25 / 385.25

Q1-19 - 374.25 / 376.75

Q2-19 - 365.50 / 368.00

CAL19 - 339.00 / 342.00

CAL20 - 273.50 / 278.50

Singapore 180 cSt

May18 - 410.25 / 412.25

Jun18 - 407.75 / 409.75

Jul18 - 405.25 / 407.25

Aug18 - 402.50 / 404.50

Sep18 - 399.75 / 401.75

Oct18 - 397.00 / 399.00

Q3-18 - 402.50 / 404.50

Q4-18 - 394.25 / 396.25

Q1-19 - 385.50 / 388.00

Q2-19 - 377.00 / 379.50

CAL19 - 353.50 / 356.50

CAL20 - 297.50 / 302.50

Rotterdam Barges

May18 - 384.50 / 386.50

Jun18 - 383.50 / 385.50

Jul18 - 381.25 / 383.25

Aug18 - 378.25 / 380.25

Sep18 - 374.75 / 376.75

Oct18 - 370.75 / 372.75

Q3-18 - 378.00 / 380.00

Q4-18 - 366.50 / 368.50

Q1-19 - 356.75 / 359.25

Q2-19 - 344.75 / 347.25

CAL19 - 319.25 / 322.25

CAL20 -248.25 / 253.25

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