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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.



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Updated on 14 May 2018 08:34 GMT

Commentary

Brent crude futures were at $76.79 per barrel at 06:48 GMT, down 33 cents, or 0.4 percent, from their last close. U.S. WTI crude futures were at $70.44 a barrel, down 26 cents, or 0.3 percent. Well, after pushing to three-and-a-half-year highs, we have pulled back. Like trying to get into a bath that's too hot, the market has pulled away. Bullish positions from funds have reduced in number, and increasing U.S. rig count has further weighed on oil prices. There was a feeling that the market was trying to really fly upon the news of the U.S. of A pulling out of the deal, but the expectation of OPEC members making up Iran's shortfall, EU and Chinese support of the deal, rising U.S. shale production, and the sheer psychological factor of $80 have acted like a lead weight around the neck of the market. One thing I can say about the current American administration is at least they are consistent... consistently controversial. Their new embassy opens on Monday in Jerusalem, and of course, last week, we had them pulling out the Iran deal. An interesting question to ask is if the U.S. wasn't becoming so energy self-reliant would any of these have happened. Middle Eastern diplomacy used to be a more thorny issue, as rising prices had a direct impact on Americans at the petrol pump. But now they can take advantage and start producing even more of their own crude. This isn't an overnight phenomenon, but one that came out of the 2014 crash. Food for thought. Good day.

Fuel Oil Market (May 11)

The front crack opened at -12.40, strengthening to -12.05, before weakening to -12.10, closing -11.95. The Cal 19 was valued at -17.70.

Asia's June fuel oil viscosity spread rose 75 cents from the previous session to end the week at a three-session high of $9.75 a tonne, reflecting a firmer market due to a shortage of blending components.

The viscosity spread is the price differential between 180 cSt and 380 cSt fuel oil and the value reflects how strong or weak the fuel oil market is. Blending components, on the other hand, are needed to lower the high-viscosity, high-density fuel oil grades.

Economic Data and Events: (Times are London.)

* APPEA Oil & Gas Conference and Exhibition in Adelaide, Australia, starts with welcome reception. May 14-17

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

* OPEC monthly oil market report, including supply/demand forecasts and estimates of OPEC's April production levels

* U.S. EIA Drilling Productivity Report

* Azeri Supsa crude loading program for June

* Venezuela public holiday

* U.S. opens embassy in Jerusalem

Singapore 380 cSt

Jun18 - 424.75 / 426.75

Jul18 - 421.25 / 423.25

Aug18 - 418.00 / 420.00

Sep18 - 414.50 / 416.50

Oct18 - 411.50 / 413.50

Nov18 - 408.25 / 410.25

Q3-18 - 418.00 / 420.00

Q4-18 - 408.00 / 410.00

Q1-19 - 396.50 / 399.00

Q2-19 - 386.00 / 388.50

CAL19 - 356.75 / 359.75

CAL20 - 291.25 / 296.25

Singapore 180 cSt

Jun18 - 434.00 / 436.00

Jul18 - 431.25 / 433.25

Aug18 - 428.00 / 430.00

Sep18 - 424.75 / 426.75

Oct18 - 422.00 / 424.00

Nov18 - 418.75 / 420.75

Q3-18 - 428.00 / 430.00

Q4-18 - 418.50 / 420.50

Q1-19 - 407.50 / 410.00

Q2-19 - 397.25 / 399.75

CAL19 - 371.25 / 374.25

CAL20 - 315.25 / 320.25

Rotterdam Barges

Jun18 - 410.25 / 412.25

Jul18 - 407.50 / 409.50

Aug18 - 403.75 / 405.75

Sep18 - 399.50 / 401.50

Oct18 - 395.00 / 397.00

Nov18 - 390.50 / 392.50

Q3-18 - 403.75 / 405.75

Q4-18 - 391.00 / 393.00

Q1-19 - 378.75 / 381.25

Q2-19 - 363.25 / 365.75

CAL19 - 335.50 / 338.50

CAL20 - 259.50 / 264.50



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 call +44 20 7090 1120, or email info@freightinvestor.com.






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