Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.



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Updated on 16 Mar 2018 10:06 GMT

Commentary

Brent crude futures trading in London fell 7 cents to $65.05 a barrel after settling up 23 cents at 03:54 GMT. Brent is down 0.7 percent for the week. WTI oil futures for April delivery fell $3 cents, or 0.1 percent, to $61.16 a barrel, after settling up $23 cents yesterday. There's an interesting industry dichotomy coming into existence: those who see oil as the current and near future saviour, and those who are turning their back on it. It was reported yesterday that Norwegian company Statoil will be changing its name to Equinor as it moves away from oil in a similar fashion to their national wealth fund. On the other hand, we have the U.S. and newcomer Ghana. The U.S. is trying to become the preeminent oil producing nation, and is in a situation when only Russia is producing more than they are. Ghana's production is expected to expand 8.3% this year, which would peg it as one of the fastest growing oil industries in the world. So we have a contrast in terms of those divesting and those reinvesting. So far today, the market is as flat as the U.K.'s economy after Brexit; we are still stuck in a neutral technical position, waiting for a breakout either side. Perhaps the market will move when the U.S. opens, or it will be one to watch on Monday.

Fuel Oil Market (March 15)

The front crack opened at -10.35, strengthening to -10.30, before weakening to -10.35. The Cal 19 was valued at -14.90.

Asia's front-month 380 cSt fuel oil time spread and crack edged lower amid limited trading activity. The April/May time spread was slightly lower on Thursday, trading at about $65 cents a tonne, remaining within a tight range of about $60-90 cents a tonne this week.

Front-month 380 cSt fuel oil crack to Brent crude was trading at about minus $10.50 a barrel during the Singapore trading window on Thursday, down from minus $10.30 a barrel in the previous session. This came as Singapore weekly onshore fuel oil inventories jumped 8%, or 1.84 million barrels (275,000 tonnes) to a 2018 high of 23.871 million barrels (about 3.56 million tonnes) in the week ended March 14.

Economic Data and Events

* 5pm: Baker Hughes U.S. rig count

* ~5pm: ICE weekly commitments of traders report for Brent, gasoil

* Commodity Futures Trading Commission weekly scheduled report on futures and options positions

* Today:

** Petro India Conference in New Delhi

** Angola preliminary crude program for May

** Eni SpA strategy presentation

Singapore 380 cSt

Apr18 - 358.25 / 360.25

May18 - 357.50 / 359.50

Jun18 - 356.50 / 358.50

Jul18 - 355.00 / 357.00

Aug18 - 353.00 / 355.00

Sep18 - 351.00 / 353.00

Q2-18 - 357.25 / 359.25

Q3-18 - 353.25 / 355.25

Q4-18 - 346.75 / 349.25

Q1-19 - 338.25 / 340.75

CAL19 - 309.75 / 313.75

CAL20 - 246.75 / 254.75

Singapore 180 cSt

Apr18 - 366.00 / 368.00

May18 - 365.25 / 367.25

Jun18 - 364.25 / 366.25

Jul18 - 363.00 / 365.00

Aug18 - 361.25 / 363.25

Sep18 - 359.25 / 361.25

Q2-18 - 365.00 / 367.00

Q3-18 - 361.00 / 363.00

Q4-18 - 354.75 / 357.25

Q1-19 - 346.75 / 349.25

CAL19 - 323.00 / 327.00

CAL20 - 270.75 / 278.75

Rotterdam Barges

Apr18 343.75 / 345.75

May18 345.00 / 347.00

Jun18 343.75 / 345.75

Jul18 342.00 / 344.00

Aug18 340.00 / 342.00

Sep18 337.25 / 339.25

Q2-18 344.75 / 346.75

Q3-18 339.75 / 341.75

Q4-18 330.25 / 332.75

Q1-19 322.50 / 325.00

CAL19 290.25 / 294.25

CAL20 235.25 / 243.25



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For further details about fuel oil swaps or to discuss trading opportunities, please call +44 20 7090 1120, or email info@freightinvestor.com.