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| Oil and fuel oil hedging market update |
| By the Oil Desk at Freight Investor Services.
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| Image credit: |
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Updated on 17 Jan 2018 09:41 GMT
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Commentary
Brent crude futures were at $69.07 a barrel at 04:41 GMT, down from a high of $69.37 earlier in the day and $18 cents below their last close. U.S. WTI crude futures CLc1 were at $63.68 a barrel, down $5 cents from their last settlement. WTI rose to $64.89 on Tuesday, also the highest since December 2014. A nice pull back last night of over a dollar. As predicted, the market weight of long positions, as well as the dizzy heights of $70, had people cutting their positions and down we tumbled. If this oil market was a game of cards, OPEC really are the ones in the prime position, along with the plucky newcomer the U.S. not far behind. For everyone else we haven't a chance, we are currently holding an array of unmatchable cards, well in the knowledge that the big two are close to putting down a royal flush. The idea of an OPEC fade out across the year is being floated, as well as Iraq coming out to back sticking to the whole year cut plan. So many options for them to take, all the while their coffers are being filled with the higher crude prices. I'm sure end users of oil products are looking about as good as Steve Bannon after a big night out, with rising prices adding to expenses. I'm sure there will be some more of this corrective phase, as oil moves down further. But contemplate this, if you were OPEC what would you do? Most probably sit with your feet up, do nothing, and watch it rise. Beware the bulls, they are not done yet; hedge funds are at record long levels, and they are going to want to get some profit to kick off the new year.
Fuel Oil Market (January 16)
The front crack opened at -11.60, strengthening to -11.45, before moving back to -11.70. The Cal 19 was valued at -12.60.
Suppliers eager to offload fuel oil cargoes ahead of the approaching Chinese new year holidays next month attracted buying interest, lifting the volume of traded cargoes on Tuesday to their highest in over a week.
The lower supplier offers and resulting deal values narrowed cash premiums of 380 cSt fuel oil cargoes to a four-session low. Meanwhile, trading volumes in the swaps market remained relatively muted with limited trade activity in fuel oil time spreads
A Singapore court on Monday filed additional charges against nine men accused in a large-scale oil theft at Shell's biggest refinery, the latest development in an extensive investigation in the city-state.
Economic Data and Events
* 5pm: U.S. MBA Mortgage Applications, Jan. 12
* 7:15pm: U.S. Industrial Production, Dec.
** Sandefjord oil conference, final day
** Genscape weekly ARA crude stockpiles report
** API issues weekly U.S. oil inventory report, one day later than usual
** Argus Americas Crude Summit, Houston, 2nd day of 3
Singapore 380 cSt
Feb18 - 373.75 / 375.75
Mar18 - 374.25 / 376.25
Apr18 - 374.75 / 376.75
May18 - 374.75 / 376.75
Jun18 - 374.25 / 376.25
Jul18 - 373.75 / 375.75
Q2-18 - 374.50 / 376.50
Q3-18 - 372.75 / 374.75
Q4-18 - 368.75 / 371.25
Q1-19 - 362.00 / 364.50
CAL19 - 341.00 / 344.00
CAL20 - 289.50 / 294.50
Singapore 180 cSt
Feb18 - 378.25 / 380.25
Mar18 - 379.25 / 381.25
Apr18 - 379.75 / 381.75
May18 - 380.00 / 382.00
Jun18 - 379.50 / 381.50
Jul18 - 379.25 / 381.25
Q2-18 - 379.75 / 381.75
Q3-18 - 378.25 / 380.25
Q4-18 - 374.75 / 377.25
Q1-19 - 369.75 / 372.25
CAL19 - 349.75 / 352.75
CAL20 - 298.75 / 303.75
Rotterdam Barges
Feb18 361.50 / 363.50
Mar18 362.75 / 364.75
Apr18 363.25 / 365.25
May18 363.00 / 365.00
Jun18 362.50 / 364.50
Jul18 361.25 / 363.25
Q2-18 362.75 / 364.75
Q3-18 359.75 / 361.75
Q4-18 351.75 / 354.25
Q1-19 343.75 / 346.25
CAL19 320.75 / 323.75
CAL20 270.50 / 275.50 |
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. |
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