Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.



Image credit: Freight Investor Services (FIS)


Updated on 13 Nov 2018 12:03 GMT

Commentary

Brent crude oil futures were at $69.39 per barrel, down 73 cents, or 1 percent, from their last close, and U.S. WTI crude oil futures were at $59.14 per barrel at 0530 GMT, down 79 cents, or 1.3 percent from their last settlement. Output is the new buzzword, as we see many more places increasing their production and no real sign of a significant move on demand. It's not only the usual players of the U.S., Saudi Arabia, and Russia, but also some of the smaller producers like Kazakhstan (now up to 1.82 million bpd) who are turning on the taps with the elevated prices. And now it's time for a game of Whose Tweet Was it Anyway? Today's is: "Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!" The answer is, of course, El Presidente Mr Trump. I feel like we should create a new term to describe a tweet by the U.S. premier that causes prices to fall only on sentiment. Ladies and Gentlemen, I give you the Trump Dump. With front-month futures now trading below $70, the whole of the OPEC guise has now fallen away. We only have just over three weeks until we get the OPEC meeting in Vienna and all the fun that is associated with that - rumour, contrary claims, number massaging. Oh the joys of this market.

Fuel Oil Market (Nov 12)

The front crack opened at -6.15, strengthening to -6.10, before weakening to -6.20. The Cal 19 was valued at -12.60.

The front-month fuel oil crack held firm on Monday despite a sharp increase in crude oil prices in a sign of ongoing nearterm strength in the market, trade sources said. This, however, came amid limited trade liquidity in the front-month crack, broker sources said.

The December 380 cSt fuel oil crack to Brent crude was trading at about minus $6.25 a barrel on Monday, compared with a discount of $6.20 a barrel on Friday.

Abu Dhabi National Oil Company will reduce its exports of a type of fuel oil prized by the market as a refining feedstock from 2019, adding to tightening global supplies of the oil product.

Exports of straight-run fuel oil are likely to will stop next year as ADNOC has nearly finished repairs to the 127,000 bpd residue fluid catalytic cracker at its Ruwais refinery.

Economic Events:

* 11am: U.S. NFIB Small Business Optimism, Oct.

* Adipec conference Abu Dhabi, 2nd day of 4

* Woodside Petroleum CEO Peter Coleman speech to Melbourne Mining Club

* EIA releases monthly Drilling Productivity Report

* OPEC issues Monthly Oil Market Report

* Caspian CPC crude loading schedule for December

Singapore 380 cSt

Dec18 - 439.00 / 441.00

Jan19 - 429.25 / 431.25

Feb19 - 421.75 / 423.75

Mar19 - 416.25 / 418.25

Apr19 - 411.25 / 413.25

May19 - 406.25 / 408.25

Q1-19 - 422.50 / 424.50

Q2-19 - 406.00 / 408.00

Q3-19 - 385.50 / 388.00

Q4-19 - 353.25 / 355.75

CAL19 - 392.25 / 395.25

CAL20 - 332.75 / 338.75

Singapore 180 cSt

Dec18 - 444.25 / 446.25

Jan19 - 435.75 / 437.75

Feb19 - 429.75 / 431.75

Mar19 - 425.00 / 427.00

Apr19 - 420.25 / 422.25

May19 - 416.00 / 418.00

Q1-19 - 430.25 / 432.25

Q2-19 - 415.75 / 417.75

Q3-19 - 398.00 / 400.50

Q4-19 - 371.25 / 373.75

CAL19 - 404.25 / 407.25

CAL20 - 354.00 / 360.00

Rotterdam 3.5%

Dec18 - 402.75 / 404.75

Jan19 - 396.25 / 398.25

Feb19 - 391.50 / 393.50

Mar19 - 386.75 / 388.75

Apr19 - 382.50 / 384.50

May19 - 377.75 / 379.75

Q1-19 - 391.50 / 393.50

Q2-19 - 378.00 / 380.00

Q3-19 - 357.75 / 360.25

Q4-19 - 323.25 / 325.75

CAL19 - 362.25 / 365.25

CAL20 - 305.75 / 311.75

0.1% Rott barges Gasoil

Dec18 - 631.05 / 633.05

Jan19 - 631.94 / 633.94

Feb19 - 632.00 / 634.00

Mar19 - 630.47 / 632.47

Apr19 - 629.75 / 631.75

May19 - 631.78 / 633.78

Q1-19 - 632.13 / 634.13

Q2-19 - 632.11 / 634.11

Q3-19 - 639.85 / 642.35

Q4-19 - 648.97 / 651.97

CAL19 - 640.95 / 644.95

CAL20 - 653.99 / 659.99

Sing GO 10ppm

Dec18 - 85.50 / 85.70

Jan19 - 85.36 / 85.56

Feb19 - 85.16 / 85.36

Mar19 - 85.07 / 85.27

Apr19 - 85.01 / 85.21

May19 - 84.99 / 85.19

Q1-19 - 85.10 / 85.50

Q2-19 - 85.06 / 85.46

Q3-19 - 85.46 / 85.76

Q4-19 - 85.86 / 86.26

CAL19 - 85.26 / 85.86

CAL20 - 85.11 / 86.11



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.