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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 08 Oct 2018 8:57 GMT

Commentary

Brent crude oil futures were at $83.26 per barrel at 0352 GMT, down 90 cents, or 1.1 percent, from their last close, and U.S. WTI crude futures were down 54 cents, or 0.7 percent, at $73.80 a barrel. Well done all those people for attempting to limit your supplies of Iranian crude. Your efforts, which haven't necessarily caused the physical effects as much as the speculative effects seen in the futures market. However, for good effort, as someone who did try to cut Iranian oil imports, you will get an American gold star with the possibility of an exemption from having to do it anymore. Right, so how does that work? Surely it's like the worst diet ever, The Brian Butterfield Diet - for those of you who are bored and want a new YouTube video to search - where you try really hard all week to eat well and cut out 'bad' foods, torturing yourself with celery and low-fat brands of everything, but come Saturday, to reward yourself for trying so hard, you can eat whatever you like for the whole day: pizza, burgers, bonbons, and wash it down with a cool glass of full fat Iranian oil. At least you can rest assured that this market does react to the major news: Iranian supply cut, up we go; Iranian supply less cut, we come a bit down. I imagine we will whip about a bit until the U.S. qualify exactly what they mean when they say they are 'looking at exemptions'. Until then, $80-85 we will stay. Good day.

Fuel Oil Market (Oct 05)

The front crack opened at -10.70, strengthening to -10.55, before weakening to -10.75, closing -10.55. The Cal 19 was valued at -15.05.

Undeterred by rising crude prices, the November 380 cSt barge fuel oil crack on Friday extended gains for a fourth straight session as concerns of tightening supplies from looming U.S. sanctions on Iranian oil exports from next month continued to boost sentiment.

The November 380 cSt barge crack was trading at about minus $10.75 a barrel to Brent crude during Asia trade, up from Thursday's close at minus $10.86 a barrel, Refinitiv data showed.

The last time the front-month crack discount was narrower was on Aug. 23 when Brent crude traded at around $74 a barrel.

Meanwhile, fuel oil inventories in the Amsterdam-RotterdamAntwerp (ARA) fell this week following increased shipments of the fuel to Singapore, where weekly fuel oil inventories held steady.

Economic data/events (Times are UK)

* U.S. Columbus Day holiday; oil futures exchanges remain open

* BTC Azeri loading program for November

Singapore 380 cSt

Nov18 - 488.25 / 490.25

Dec18 - 482.50 / 484.50

Jan19 - 476.75 / 478.75

Feb19 - 471.25 / 473.25

Mar19 - 466.25 / 468.25

Apr19 - 461.50 / 463.50

Q1-19 - 471.25 / 473.25

Q2-19 - 456.25 / 458.25

Q3-19 - 436.00 / 438.50

Q4-19 - 398.25 / 400.75

CAL19 - 440.00 / 443.00

CAL20 - 366.50 / 372.50

Singapore 180 cSt

Nov18 - 495.25 / 497.25

Dec18 - 490.75 / 492.75

Jan19 - 486.75 / 488.75

Feb19 - 481.75 / 483.75

Mar19 - 476.75 / 478.75

Apr19 - 472.50 / 474.50

Q1-19 - 481.75 / 483.75

Q2-19 - 467.75 / 469.75

Q3-19 - 450.00 / 452.50

Q4-19 - 419.00 / 421.50

CAL19 - 454.00 / 457.00

CAL20 - 388.00 / 394.00

Rotterdam 3.5%

Nov18 - 460.00 / 462.00

Dec18 - 454.75 / 456.75

Jan19 - 451.00 / 453.00

Feb19 - 447.50 / 449.50

Mar19 - 443.75 / 445.75

Apr19 - 440.00 / 442.00

Q1-19 - 447.50 / 449.50

Q2-19 - 435.25 / 437.25

Q3-19 - 412.00 / 414.50

Q4-19 - 372.00 / 374.50

CAL19 - 416.00 / 419.00

CAL20 - 347.25 / 353.25



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.






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

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