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Thu 18 Jan 2018, 09:02 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed last night at $69.38, WTI closed at $63.97. So here we are, $70 per bbl. Did anyone take any notice, though, when I said that US oil stocks are actually increasing? The crude that's being drawn isn't going anywhere, it's just been turned into oil products. This week, apparently we should see another draw on crude stocks in the US, and guess what? You got it - a build in product inventories.

Fuel Oil Market (January 17)

The front crack opened at -11.70, strengthening to -11.50 across the day. The Cal 19 was valued at -12.60.

The discount in Asia's front-month 380 cSt fuel oil time spread was trading at its widest since early-August on Wednesday as concerns of limited spot demand and ample prompt supplies of the fuel continued to weigh on market sentiment.

The Singapore 380 cSt Feb-March time spread was trading at a discount of 70 cents a tonne around 5pm Singapore time on Wednesday in the Intercontinental Exchange, down from its -50 cents a tonne settlement in the previous session. Total fuel oil flows into East Asia for January are expected to close lower than December's 10- month high of about 6.7 million tonnes.

Fujairah fuel oil inventories dropped 6 percent, or 545,000 barrels (about 81,000 tonnes), to a three-week low of 8.529 million barrels (1.273 million tonnes) in the week ended Jan. 15.

Economic Data and Events

Singapore 380 cSt

Feb18 - 375.75 / 377.75

Mar18 - 376.25 / 378.25

Apr18 - 376.75 / 378.75

May18 - 376.75 / 378.75

Jun18 - 376.25 / 378.25

Jul18 - 375.75 / 377.75

Q2-18 - 376.75 / 378.75

Q3-18 - 374.75 / 376.75

Q4-18 - 370.75 / 373.25

Q1-19 - 364.00 / 366.50

CAL19 - 340.75 / 343.75

CAL20 - 289.25 / 294.25

Singapore 180 cSt

Feb18 - 380.25 / 382.25

Mar18 - 381.25 / 383.25

Apr18 - 381.75 / 383.75

May18 - 382.00 / 384.00

Jun18 - 381.50 / 383.50

Jul18 - 381.25 / 383.25

Q2-18 - 381.75 / 383.75

Q3-18 - 380.25 / 382.25

Q4-18 - 376.75 / 379.25

Q1-19 - 371.75 / 374.25

CAL19 - 349.25 / 352.25

CAL20 - 298.25 / 303.25

Rotterdam Barges

Feb18 363.00 / 365.00

Mar18 364.25 / 366.25

Apr18 364.75 / 366.75

May18 364.50 / 366.50

Jun18 364.00 / 366.00

Jul18 362.75 / 364.75

Q2-18 364.25 / 366.25

Q3-18 361.25 / 363.25

Q4-18 353.25 / 355.75

Q1-19 345.25 / 347.75

CAL19 320.25 / 323.25

CAL20 270.00 / 275.00

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