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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 11 Oct 2018 9:01 GMT

Commentary

Brent crude futures were down $1.22, or 1.5 percent, at $81.87 a barrel by 02:37 GMT. They earlier touched their lowest since Sept. 28 at $81.61 after closing 2.2 percent lower on Wednesday. U.S. WTI crude futures were down by $1, or 1.4 percent, at $72.17, having also fallen to their lowest since Sept. 28. They dropped 2.4 percent in the previous session. What goes up, must come down. Well, at least a little bit. We have seen a dizzying rise of oil prices recently; so like anything in this world, it had to end its stratospheric rise at some point. And the straw that broke the camel's back: global markets and the good old API. With global markets taking a hit down to 3-month lows and around a 3% drop, it also dragged down sentiment in the crude market. Add in the kick in the teeth of the API predicting a U.S. stocks build of 9.7 million barrels, and you have all you need for the check in oil's rise. It also seems that the shutdown of the Gulf of Mexico due to the hurricane will only really have a minimal effect of several days' disruption before production returns back to normal - think more mosquito bite compared to being hit by a bus. It's definitely a time to consider entering the market on this dip with the crack weakening making prices relatively cheap. The question now is do the bulls have the appetite to restart this move upwards again, or will the EIA data later this afternoon check any new advance in prices? Good day.

Fuel Oil Market (Oct 10)

The front crack opened at -9.70, weakening to -10.05, before strengthening to -9.95, closing -10.00. The Cal 19 was valued at -14.70.

Rising crude oil prices weighed on the front-month 380 cSt barge fuel oil crack on Wednesday, widening its discount to Brent crude further from a near two-month high at the start of the week.

Total fuel oil flows into East Asia for October are estimated to be around 5.4-5.5 million tonnes, similar to the volumes seen in June and July and among the lowest for the year, assessments from Refinitiv showed on Tuesday.

Fuel oil inventories at the Fujairah Oil Industry Zone (FOIZ) edged 0.5 percent lower, or 38,000 barrels (about 6,000 tonnes), to a two-week low of 7.934 million barrels (1.184 million tonnes) in the week ended Oct. 8.

Economic data/events (Times are UK)

* 4pm: EIA weekly U.S. oil inventory report

* Singapore onshore oil-product stockpile data

* OPEC monthly market report

* Amir Gerges, who oversees Shell's Permian Basin assets, speaks at a Baker Institute event at Rice University, Houston

* Oil & Money conference, final day. Speakers include OPEC Secretary-General Mohammad Barkindo, Valero Energy CEO

* Russian refining maintenance schedule from ministry

Singapore 380 cSt

Nov18 - 481.00 / 483.00

Dec18 - 475.50 / 477.50

Jan19 - 470.00 / 472.00

Feb19 - 464.50 / 466.50

Mar19 - 459.50 / 461.50

Apr19 - 454.75 / 456.75

Q1-19 - 464.50 / 466.50

Q2-19 - 449.50 / 451.50

Q3-19 - 428.25 / 430.75

Q4-19 - 391.25 / 393.75

CAL19 - 434.75 / 437.75

CAL20 - 360.25 / 366.25

Singapore 180 cSt

Nov18 - 488.50 / 490.50

Dec18 - 484.25 / 486.25

Jan19 - 480.50 / 482.50

Feb19 - 474.75 / 476.75

Mar19 - 470.00 / 472.00

Apr19 - 465.50 / 467.50

Q1-19 - 475.00 / 477.00

Q2-19 - 460.75 / 462.75

Q3-19 - 442.50 / 445.00

Q4-19 - 412.75 / 415.25

CAL19 - 448.75 / 451.75

CAL20 - 382.75 / 388.75

Rotterdam 3.5%

Nov18 - 452.50 / 454.50

Dec18 - 447.25 / 449.25

Jan19 - 443.25 / 445.25

Feb19 - 439.50 / 441.50

Mar19 - 435.50 / 437.50

Apr19 - 431.00 / 433.00

Q1-19 - 439.50 / 441.50

Q2-19 - 427.00 / 429.00

Q3-19 - 404.75 / 407.25

Q4-19 - 365.50 / 368.00

CAL19 - 410.25 / 413.25

CAL20 - 341.50 / 347.50



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

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