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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.



Freight Investor Services (FIS) logo. Image credit: Freight Investor Services (FIS)


Updated on 14 Dec 2017 08:49 GMT

Commentary

Brent closed down $0.90 last night to $62.44, WTI closed at $56.60, down $0.54. Well another Wednesday of EIA data, which historically would have yielded a rally in flat price, but in these modern times, the crude draw was ignored like fudge in a box of Quality Street. Granted, the market did pause after EIA data was announced, but I think this was purely down to the fact that every trader had a mouthful of Pret A Manger's Roast Turkey and Cranberry sauce sandwich than they did question whether the data was bullish or bearish. US production is quietly but surely increasing and you can't say we didn't warn you. It doesn't take a genius to work out that with OPEC extending the cuts and WTI nearing $60, that US producers are going to increase production. Production will be at 10mn bbls-plus soon and who knows where it will be this time next year. However, I don't see this increased US production as ephemeral, quite the opposite. With the extra revenue being generated with higher prices, the US producers will invest this income into making their technology more efficient so they can produce more oil at lower costs. If they put it in the balance sheet and pay it out as dividends, then the divs really will be themselves.

Fuel Oil Market (December 13)

The front crack opened at -9.70, strengthening to -9.30 across the day. The Cal 18 was valued at -8.45.

Ex-wharf premiums of Singapore 380 cSt high-sulphur fuel oil have narrowed in December as suppliers seek to reduce their inventories of the fuel ahead of the new year. 380 cSt fuel oil ex-wharf premiums traded at about $2-$3 a tonne to Singapore quotes in December so far, down from about $3-$4 a tonne in the second half of November, sources added.

Singapore's marine fuel sales climbed to 4.316 million tonnes in November, up 4.2 percent from a year earlier, with fewer vessels coming to the world's largest bunkering hub but loading a record amount of bunker fuel per vessel on average.

Fujairah inventories snapped three weeks of builds after falling 13.4%, or 1.650 million barrels (about 246,000 tonnes), from a week ago to 10.664 million barrels (1.59 mil tns) in the week ended Dec. 11.

Economic Data/Events: (UK times)

* 8am: Singapore onshore oil-product stockpile data

* 9am: IEA monthly Oil Market Report

* 9am: Russian President Vladimir Putin holds annual year-end news conference

* NOTE: EIA releases U.S. crude oil and natural gas proved reserves for 2016

* See OIL WEEKLY AGENDA for this week's events

Singapore 380 cSt

Jan18 - 351.50 / 353.50

Feb18 - 351.00 / 353.00

Mar18 - 351.00 / 353.00

Apr18 - 350.50 / 352.50

May18 - 350.00 / 352.00

Jun18 - 349.25 / 351.25

Q1-18 - 351.00 / 353.00

Q2-18 - 350.25 / 352.25

Q3-18 - 346.75 / 349.25

Q4-18 - 341.75 / 344.25

CAL18 - 347.00 / 350.00

CAL19 - 314.00 / 319.00

Singapore 180 cSt

Jan18 - 355.75 / 357.75

Feb18 - 355.75 / 357.75

Mar18 - 356.00 / 358.00

Apr18 - 356.00 / 358.00

May18 - 355.75 / 357.75

Jun18 - 355.00 / 357.00

Q1-18 - 355.75 / 357.75

Q2-18 - 356.00 / 358.00

Q3-18 - 353.00 / 355.50

Q4-18 - 348.25 / 350.75

CAL18 - 352.75 / 355.75

CAL19 - 322.75 / 327.75

Rotterdam 380 cSt

Jan18 35.75 / 337.75

Feb18 336.25 / 338.25

Mar18 336.75 / 338.75

Apr18 336.25 / 338.25

May18 335.50 / 337.50

Jun18 334.75 / 336.75

Q1-18 336.25 / 338.25

Q2-18 336.00 / 338.00

Q3-18 331.75 / 334.25

Q4-18 23.50 / 326.00

CAL18 331.50 / 334.50

CAL19 291.50 / 296.50



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 contact Andrew Cullen, Client Relations & Development Manager, on +44 207 090 1126, or email AndrewC@freightinvestor.com.






Related Links:

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

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