Mon 25 Jun 2018, 09:25 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed Friday up $2.50 to $75.55 and WTI closed up $3.04 to $68.58. I don't know about you but I'm not too sure what ACTUALLY happened at the OPEC meeting on Friday and Saturday. Yes, I know they have agreed to raise production. But I'm not sure how and by whom. Listening to the OPEC ministers speak was like listening to a press conference by Jose Mourinho: it makes sense but not directly vs the question he is being asked. "Jose, what did you think of today’s performance", "Yes I was the special one and I still can be, like bull running down street". Ermmm, ok thanks Jose. It turns out that Jose's bull wasn't the only one running down the street on Friday and we closed up. Big styli. 'Mission accomplished', as Mr Barkindo would call it. Unfortunately not, it would seem. You see, this market isn't quite as stupid and fickle as it would have you believe, even though the market welcomed the news on Friday that OPEC will apparently still keep a lid on things somewhat, it is apparent that the market isn't going to be near a production problem anytime soon. Good day and week to all.

Fuel Oil Market (June 22)

The front crack opened at -9.95, before strengthening to - 9.80 across the day. The Cal 19 was valued at -16.10.

Asia's 180 cSt fuel oil crack strengthened for a third straight day, supported by stronger fundamentals.

The 18 cSt grade crack rose 18 cents to reach a discount against crude at $4.95 a tonne, making this the narrowest discount in 2-1/2 weeks. Although fuel oil stocks were seen higher in the West, inventories in Singapore and Fujairah this week were down.

Fuel oil stocks held independently at the AmsterdamRotterdam-Antwerp (ARA) refining and storage hub reflected an increase of 3.58 percent, or 53,000 tonnes, to 1.534 million tonnes in the week to Thursday. This was the highest stockpile level since March 30, 2017.

Economic data/events (Times are London.)

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

* 1:30pm: Chicago Fed National Activity Index, May

* 3pm: U.S. New Home Sales, May

* 3:30pm: Dallas Fed Manufacturing Activity, June

* 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

Singapore 380 cSt

Jul18 - 432.75 / 434.75

Aug18 - 426.25 / 428.25

Sep18 - 421.00 / 423.00

Oct18 - 416.75 / 418.75

Nov18 - 413.50 / 415.50

Dec18 - 410.25 / 412.25

Q3-18 - 426.50 / 428.50

Q4-18 - 414.50 / 416.50

Q1-19 - 404.25 / 406.75

Q2-19 - 393.25 / 395.75

CAL19 - 368.00 / 371.00

CAL20 - 293.75 / 298.75

Singapore 180 cSt

Jul18 - 442.50 / 444.50

Aug18 - 436.50 / 438.50

Sep18 - 431.50 / 433.50

Oct18 - 427.50 / 429.50

Nov18 - 424.50 / 426.50

Dec18 - 421.50 / 423.50

Q3-18 - 436.75 / 438.75

Q4-18 - 425.25 / 427.25

Q1-19 - 415.50 / 418.00

Q2-19 - 405.00 / 407.50

CAL19 - 383.25 / 386.25

CAL20 - 317.25 / 322.25

Rotterdam 3.5%

Jul18 - 412.75 / 414.75

Aug18 - 409.25 / 411.25

Sep18 - 405.00 / 407.00

Oct18 - 400.50 / 402.50

Nov18 - 396.25 / 398.25

Dec18 - 392.25 / 394.25

Q3-18 - 409.00 / 411.00

Q4-18 - 396.25 / 398.25

Q1-19 - 386.00 / 388.50

Q2-19 - 372.50 / 375.00

CAL19 - 347.25 / 350.25

CAL20 - 280.25 / 285.25


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