Mon 22 Oct 2018, 09:47 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 oil futures were at $80.26 a barrel at 06:46 GMT, up 48 cents, or 0.6 percent, above their last close, and U.S. WTI crude futures were at $69.60 a barrel, up 48 cents, or 0.7 percent. If the oil market this morning was a radio music show, it would be a 1970s classics show - full of ones we've all heard before and know well. I'm sure, for any end users, their requests would be 'Killing Me Softly' or perhaps 'Stayin' Alive', and any talk of fundamentals - and maybe demand forecasts - not living up to expectations simply 'Too Much, Too Little, Too Late'. OPEC are singing loudly 'Let's Get It On' as they have watched this market 'Rise' in Herb Alpert style, and a big grin as they 'Image' a market of $100. The Iran sanctions saga raises the question: 'Will It Go Round in Circles' until 'The Joker' in the U.S. decides exactly what his foreign policy is going to be? For most of us, its it's just a time to say 'Babe', keep calm, 'No More Tears (Enough is Enough)', the 'Good Times' will return. In normal speak, Iran has been the main driver of this slight move up this morning, but an increase in the U.S. oil rig count reported by Baker Hughes has kept a lid on the price rise so far. Time for a double-shot Monday morning coffee.

Fuel Oil Market (Oct 19)

The front crack opened at -7.70, weakening to -7.80, before strengthening to -7.60. The Cal 19 was valued at -12.80

Asia's 380 cSt time spread climbed for a third straight session on Friday to a near two-week high as tight near-term supplies of finished grade fuel oil continued to lend support.

The Nov/Dec time spread for 380 cSt fuel oil widened its premium to $7 a tonne on Friday, up 25 cents a tonne from the previous session and its highest since Oct. 9.

China's Ministry of Commerce approved bonded fuel oil blending businesses in the free-trade zone area located in the city of Zhoushan, in Zhejiang province, according to a statement published on the ministry website on Friday.

Economic data/events (Times are UK)

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

* 1:30pm: Chicago Fed Nat Activity Index, Sept.

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

* OPEC Board of Governors meeting, discussion of administrative issues, 2nd day of 3

Singapore 380 cSt

Nov18 - 490.25 / 492.25

Dec18 - 483.00 / 485.00

Jan19 - 476.00 / 478.00

Feb19 - 469.50 / 471.50

Mar19 - 464.25 / 466.25

Apr19 - 459.25 / 461.25

Q1-19 - 470.00 / 472.00

Q2-19 - 454.00 / 456.00

Q3-19 - 433.75 / 436.25

Q4-19 - 400.00 / 402.50

CAL19 - 438.00 / 441.00

CAL20 - 369.50 / 375.50

Singapore 180 cSt

Nov18 - 497.50 / 499.50

Dec18 - 491.25 / 493.25

Jan19 - 486.00 / 488.00

Feb19 - 479.50 / 481.50

Mar19 - 474.50 / 476.50

Apr19 - 469.75 / 471.75

Q1-19 - 480.00 / 482.00

Q2-19 - 465.00 / 467.00

Q3-19 - 447.75 / 450.25

Q4-19 - 421.25 / 423.75

CAL19 - 452.25 / 455.25

CAL20 - 392.50 / 398.50

Rotterdam 3.5%

Nov18 - 459.25 / 461.25

Dec18 - 452.25 / 454.25

Jan19 - 447.50 / 449.50

Feb19 - 443.00 / 445.00

Mar19 - 438.50 / 440.50

Apr19 - 434.25 / 436.25

Q1-19 - 443.00 / 445.00

Q2-19 - 429.75 / 431.75

Q3-19 - 409.75 / 412.25

Q4-19 - 375.75 / 378.25

CAL19 - 413.50 / 416.50

CAL20 - 347.00 / 353.00


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