Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.



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Updated on 27 Dec 2017 10:00 GMT

Commentary

Brent closed last night at $67.02, WTI closed at $59.97. Wow. Did Wall St get the Christmas song mixed up? All I want for Christmas is crude? What a Christmas gift for the bulls with news of a pipeline explosion in Libya. Quite whether this was some technical traders taking advantage of London stuffing their faces with bubble and squeak and leftover Turkey is anyone's guess. I wonder though - what with the Forties pipeline restarting soon, London waddling back in and the Es Sider pipe that was sabotaged coming back online as soon as mid Jan, will the market readjust as quick as it is to spike? Probably not is the answer, I think. I still feel it is hope more than facts that are making people think the market balance is tighter than it actually is. But on its merry way it goes and as soon as news of a crude supply disruption breaks, the market jumps on it quicker than people who overindulge at Christmas sign up for a January gym membership. Quite how US oil production is being happily ignored when it is more than capable of plugging any supply deficits is beyond me, but 'ignorance is bliss' seems to be the phrase of 2017 if you're a crude producer outside of the US. Expect some volatility in the coming days on fairly thin trading.

Fuel Oil Market (December 22)

The front crack opened at -8.65, weakening to -8.75 across the day. The Cal 18 was valued at -8.10.

Singapore 380 cSt

Jan18 - 374.50 / 376.50

Feb18 - 373.75 / 375.75

Mar18 - 373.50 / 375.50

Apr18 - 373.00 / 375.00

May18 - 372.50 / 374.50

Jun18 - 372.50 / 374.50

Q1-18 - 374.00 / 376.00

Q2-18 - 372.50 / 374.50

Q3-18 - 368.50 / 371.00

Q4-18 - 363.75 / 366.25

CAL18 - 369.50 / 372.50

CAL19 - 333.25 / 338.25

Singapore 180 cSt

Jan18 - 378.50 / 380.50

Feb18 - 378.25 / 380.25

Mar18 -378.50 / 380.50

Apr18 - 378.25 / 380.25

May18 - 377.75 / 379.75

Jun18 - 377.00 / 379.00

Q1-18 - 378.50 / 380.50

Q2-18 - 377.75 / 379.75

Q3-18 - 374.25 / 376.75

Q4-18 - 3369.75 / 372.25

CAL18 - 375.00 / 378.00

CAL19 - 342.00 / 347.00

Rotterdam Barges

Jan18 360.50 / 362.50

Feb18 359.75 / 361.75

Mar18 359.50 / 361.50

Apr18 359.00 / 361.00

May18 358.00 / 360.00

Jun18 358.00 / 360.00

Q1-18 360.00 / 362.00

Q2-18 358.00 / 360.00

Q3-18 352.75 / 355.25

Q4-18 343.75 / 346.25

CAL18 354.00 / 357.00

CAL19 312.25 / 317.25



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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.