Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.



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Updated on 21 Dec 2017 09:05 GMT

Fuel Oil Market (December 20)

The front crack opened at -8.60, weakening to -8.75, before strengthening to -8.50. The Cal 18 was valued at -8.00.

Cracks and time spreads of Asia's high-sulphur fuel oil slipped on Wednesday as expectations of ample nearterm supplies weighed on sentiment. The January 180 cSt fuel oil crack to Brent crude widened its discount to minus $5.68 a barrel on Wednesday, down from minus $5.37 a barrel in the previous session; its narrowest discount in two-weeks.

Total fuel oil flows into East Asia for December are expected to close at a 10-month high of about 7 million tonnes, above November's 6.2-6.3 million tonnes. This follows the delay of November Western arrivals into December, boosting Western inflows to above 4 million tonnes for the month and the second-highest volume of Middle East arrivals at just over 2 million tonnes.

Economic Data/Events: (UK times)

* 1:30pm: Philadelphia Dec. Fed business outlook, est. 21 (prior 22.7)

* 1:30pm: U.S. 3Q GDP annualized, est. 3.3% (prior 3.3%)

* 1:30pm: U.S. initial jobless claims for Dec. 16, est. 233k (prior 225k)

* 1:30pm: U.S. continuing claims for Dec. 9, est. 1898k (prior 1886k)

* 1:30pm: Chicago Nov. Fed Nat activity index, est. 0.50 (prior 0.65)

* 2:45pm: U.S. Bloomberg weekly consumer comfort index for Dec. 17, prior 51.3

* 2:45pm: U.S. Dec. Bloomberg national economy expectations diffusion index, prior 53

* 8pm: API monthly report

Singapore 380 cSt

Jan18 - 366.75 / 368.75

Feb18 - 366.25 / 368.25

Mar18 - 366.00 / 368.00

Apr18 - 365.50 / 367.50

May18 - 365.00 / 367.00

Jun18 - 364.00 / 366.00

Q1-18 - 366.50 / 368.50

Q2-18 - 364.75 / 366.75

Q3-18 - 360.75 / 363.25

Q4-18 - 356.25 / 358.75

CAL18 - 361.25 / 364.25

CAL19 - 328.00 / 333.00

Singapore 180 cSt

Jan18 - 370.75 / 372.75

Feb18 - 371.00 / 373.00

Mar18 - 371.00 / 373.00

Apr18 - 370.75 / 372.75

May18 - 370.25 / 372.25

Jun18 - 369.50 / 371.50

Q1-18 - 371.00 / 373.00

Q2-18 - 370.00 / 372.00

Q3-18 - 366.75 / 369.25

Q4-18 - 362.50 / 365.00

CAL18 - 366.75 / 369.75

CAL19 - 336.75 / 341.75

Rotterdam 380 cSt

Jan18 352.25 / 354.25

Feb18 352.00 / 354.00

Mar18 352.00 / 354.00

Apr18 351.50 / 353.50

May18 350.75 / 352.75

Jun18 349.75 / 351.75

Q1-18 352.25 / 354.25

Q2-18 350.75 / 352.75

Q3-18 345.50 / 348.00

Q4-18 336.50 / 339.00

CAL18 345.25 / 348.25

CAL19 304.25 / 309.25



Founded in 2002, Freight Investor Services is a specialist in dry bulk and commodity derivatives, including cargo freight, iron ore, fertilizer and bunker fuel. The company has offices in London, Dubai, Singapore and Shanghai.

For further details about fuel oil swaps or to discuss trading opportunities, please contact Andrew Cullen, Client Relations & Development Manager, on +44 207 090 1126, or email AndrewC@freightinvestor.com.