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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.



Image credit: Freight Investor Services (FIS)


Updated on 16 Aug 2018 08:38 GMT

Commentary

Brent closed last night down $1.70 to $70.76 and WTI closed at $65.01, down $2.03. Jeeze Louise. Not a particularly set of encouraging numbers from EIA last night, was it? Well, not for the bulls, I suppose. Any short sellers must be in the pub already. I mentioned yesterday that driving season has been nothing short of appalling, and unless the whole of the USA get in their V8 F150s and decide to drive the Cannonball run, I can't see a how the next couple of weeks are going to rescue it. I mention the F150 pickup truck quite a bit and here are some facts for you as to why I do: Ford has sold enough F-series trucks to circle the earth more than three times. Ford sells a pick up truck every minute of every day. MPG in 2010 was 12mpg. Today it is 24mpg. I won't labour this point much more, but traders taking a view based on driving season is like going to Blockbuster to rent a video because you ignore Netflix. It is archaic. Times have moved on, engines have evolved and only become more efficient. Yes, more people might be driving, but look at your average taxi? Is it still a Vauxhall Omega? No, it is a Prius. The unstable guy behind the wheel is still there, but at least he knows what a hybrid is - unlike most traders, it seems. It's a bit like the U.K. power grid: yes, there has been an increasing number of houses and appliances that need electrical supply, but due to efficiency savings overall, demand hasn't increased. Refinery rates are nigh on 100pct in the US, which is crazy considering crude imports were UP last week. I said on Monday that Cushing stocks and the Syncrude pipeline outage are the only real supporting factors at the moment for crude. Alas, it looks like that may be coming back online as Cushing levels were up. Good day.

Fuel Oil Market (Aug 15)

The front crack opened at -8.85, weakening to -9.00, before strengthening to -8.70. The Cal 19 was valued at -14.55.

Front-month time spreads for Asia's 380 cSt fuel oil slipped to a more than one-week low on Wednesday as industry participants expected improved higher supplies in August and September to ease supply constraints in the Singapore trading and storage hub..

The 380 cSt Sept/Oct time spread was trading at about $5 a tonne on Wednesday, down from $5.25 a tonne on Tuesday and its lowest since Aug 7.

Meanwhile, tight supplies of finished grade 380 cSt bunker fuels helped to lift ex-wharf premiums of the fuel to about $10-$12 a tonne this week, up from about $8-$10 a tonne a week ago, trade sources said..

Total fuel oil flows into East Asia in August are expected to be higher from the previous month, with about 6 million tonnes notionally assessed so far.

Economic data/events (Times are London.)

* 1:30pm: Philadelphia Fed Business, Aug.

* 1:30pm: U.S. Continuing Claims, Aug. 4

* 1:30pm: U.S. Initial Jobless Claims, Aug. 11

* 1:30pm: U.S. Housing Starts, July

* 2:45pm: Bloomberg U.S. Economic Expectations, Aug.

* 2:45pm: Bloomberg Consumer Comfort, Aug. 12

* Today, no exact timing:

** Russian refining maintenance schedule from ministry

** Singapore onshore oil-product stockpile data

Singapore 380 cSt

Sep18 - 418.75 / 420.75

Oct18 - 413.00 / 415.00

Nov18 - 409.00 / 411.00

Dec18 - 405.75 / 407.75

Jan19 - 402.50 / 404.50

Feb19 - 399.25 / 401.25

Q4-18 - 409.25 / 411.25

Q1-19 - 399.75 / 401.75

Q2-19 - 390.75 / 393.25

Q3-19 - 374.75 / 377.25

CAL19 - 375.75 / 378.75

CAL20 - 306.00 / 312.00

Singapore 180 cSt

Sep18 - 426.25 / 428.25

Oct18 - 421.75 / 423.75

Nov18 - 418.25 / 420.25

Dec18 - 415.50 / 417.50

Jan19 - 412.75 / 414.75

Feb19 - 409.75 / 411.75

Q4-18 - 418.50 / 420.50

Q1-19 - 410.25 / 412.25

Q2-19 - 403.25 / 405.75

Q3-19 - 389.75 / 392.25

CAL19 - 390.75 / 393.75

CAL20 - 329.25 / 335.25

Rotterdam 3.5%

Sep18 - 396.50 / 398.50

Oct18 - 391.00 / 393.00

Nov18 - 387.25 / 389.25

Dec18 - 384.00 / 386.00

Jan19 - 381.75 / 383.75

Feb19 - 379.50 / 381.50

Q4-18 - 387.50 / 389.50

Q1-19 - 379.50 / 381.50

Q2-19 - 370.75 / 373.25

Q3-19 - 351.50 / 354.00

CAL19 - 353.50 / 356.50

CAL20 - 292.25 / 298.25



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






Related Links:

Oil and fuel oil hedging market update
Freight Investor Services Ltd.

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