Mon 15 Oct 2018, 09:28 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.


Image credit: Freight Investor Services (FIS)
Commentary

Brent crude had risen 98 cents, or 1.22 percent, to $81.41 a barrel by 07:10 GMT, on track for its biggest daily gain since Oct. 9, and U.S. crude futures climbed 45 cents, or 0.62 percent, to $71.77 a barrel, extending gains they racked up on Friday after hefty losses on Wednesday and Thursday. The political football is being kicked about the Middle East as diplomatically Western countries must show some sort of disdain for the treatment of journalists in Turkey and more recently Saudi Arabia, all the while not being too strong as many a U.S. job rests on arms sales to the Islamic Kingdom. An economic rock meets a moral hard place, and I'm pretty sure the rock will win in most situations, so all this hot air about concerns of supply from a diplomatic row seems a little over-baked. There doesn't seem to be much concrete 'new' news of last week to be causing any price movements. It seems more a situation of 'finger in the air', trying to predict the wind direction on a very still day. Any small breeze makes it seem that you have suddenly discovered the faint direction of the futures market before you realise that it was your own breath... Good luck all.

Fuel Oil Market (Oct 12)

The front crack opened at -9.55, strengthening to -8.90 across the day. The Cal 19 was valued at -14.40.

Asia's fuel oil market closed steady on Friday but posted losses for the week, reflecting expectations of an improvement in near-term supply outlook due to higher Western arbitrage supplies in November, trade sources said..

The prompt-month 380 cSt time spread was unchanged from the previous session at $6.50 a tonne on Friday, but was down from a two-month high of $7.25 a tonne on Monday

Meanwhile, 380 cSt cash premiums edged higher 13 cents a tonne to $5.35 a tonne to Singapore quotes on Friday, snapping four straight sessions of declines on improved buying interest.

Weekly fuel oil stocks in the ARA oil and storage hub fell 17 percent, or 216,000 tonnes, to a total of 1.031 million tonnes in the week ended Oct. 11, data from Dutch consultancy PJK International showed.

Economic data/events (Times are UK)

* 1:30pm: U.S. Empire Manufacturing, Oct.

* 1:30pm: U.S. Retail Sales, Sept.

* 3pm: U.S. Business Inventories, Aug.

* CERAWeek India Energy Forum in New Delhi, day 2

* EIA Monthly Drilling Productivity Report

* Bloomberg to publish tanker tracker of Iran's crude exports for first half of October, ahead of Nov. 4 start of U.S. sanctions

* Bloomberg forecast of U.S. waterborne LPG exports

* Bloomberg proprietary forecast of Cushing crude inventory change; plus weekly analyst survey of crude, gasoline, distillate inventories before EIA weekly inventory report

* Total publishes 3Q refining margin indicator

Singapore 380 cSt

Nov18 - 481.25 / 483.25

Dec18 - 475.25 / 477.25

Jan19 - 469.25 / 471.25

Feb19 - 463.50 / 465.50

Mar19 - 458.50 / 460.50

Apr19 - 453.75 / 455.75

Q1-19 - 463.75 / 465.75

Q2-19 - 448.75 / 450.75

Q3-19 - 429.00 / 431.50

Q4-19 - 394.00 / 396.50

CAL19 - 431.00 / 434.00

CAL20 - 356.25 / 362.25

Singapore 180 cSt

Nov18 - 489.50 / 491.50

Dec18 - 484.25 / 486.25

Jan19 - 479.50 / 481.50

Feb19 - 473.50 / 475.50

Mar19 - 468.75 / 470.75

Apr19 - 464.25 / 466.25

Q1-19 - 474.00 / 476.00

Q2-19 - 459.75 / 461.75

Q3-19 - 443.00 / 445.50

Q4-19 - 415.25 / 417.75

CAL19 - 445.00 / 448.00

CAL20 - 379.00 / 385.00

Rotterdam 3.5%

Nov18 - 451.50 / 453.50

Dec18 - 445.75 / 447.75

Jan19 - 441.75 / 443.75

Feb19 - 438.00 / 440.00

Mar19 - 434.25 / 436.25

Apr19 - 429.75 / 431.75

Q1-19 - 438.00 / 440.00

Q2-19 - 426.25 / 428.25

Q3-19 - 404.50 / 407.00

Q4-19 - 366.50 / 369.00

CAL19 - 405.75 / 408.75

CAL20 - 337.00 / 343.00


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