Wed 31 Oct 2018, 09:18 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.


Image credit: Freight Investor Services (FIS)
Commentary

Brent crude futures had gained 49 cents, or 0.7 percent, to $76.40 a barrel by 06:19 GMT. They fell 1.8 percent yesterday, at one point touching their lowest since Aug. 24 at $75.09 a barrel. U.S. WTI crude futures advanced 28 cents, or 0.4 percent, to $66.46 a barrel on Wednesday. They dropped 1.3 percent the day before, after hitting their lowest since Aug. 17 at $65.33 a barrel. After a short holiday, the bulls are back. It seems that all the bullish traders took a nice city break away, but now they have returned, with the market recovering over half of its loses that it suffered yesterday. Our ever-accurate friend, the API, reported U.S. crude inventories rose 5.7 million barrels last week, more than analyst's forecasts for a 4.1 million barrel build. Interestingly, this doesn't seem to be the driver of the market this morning, but I'm sure will affect anything that has happened later this afternoon when the EIA confirm the data levels at 2.30 pm UK time. We have an interesting November ahead of us with sanctions on Iran to come into effect and an OPEC meeting, so I don't think the yoyo up and down of prices is over yet. Good day.

Fuel Oil Market (Oct 30)

The front crack opened at -6.50, strengthening to -6.25, before weakening to -6.50. The Cal 19 was valued at -13.20.

Asia's front-month 180-centistokes (cSt) high-sulphur fuel oil crack to Dubai crude slipped on Tuesday, after four straight sessions of gains to a record high in the previous session.

The November Singapore 180 cSt fuel oil crack narrowed its premium to $1.06 a barrel to Dubai crude, compared with a record high of $1.61 a barrel on Monday.

Firm demand and concerns of tight prompt supplies of finished grade fuel oil in the Singapore storage and trading hub have helped boost fuel oil cash premium, time spreads and refining margins to fresh highs recently.

However, further gains could be capped amid expectations of higher arbitrage flows into Asia in November.

Economic Events: (Times are UK)

* 11am: MBA Mortgage Applications, Oct. 26

* 12:15am: U.S. ADP Employment Change, Oct.

* 1:45pm: Chicago Purchasing Manager, Oct.

* 2:30pm: EIA weekly oil inventory report; TopLive blog starts 2:20pm

* Genscape weekly ARA crude stockpiles report

* Singapore International Energy Week, 2nd day of 3

* EIA's Monthly Crude Oil and Natural Gas Production report

* EARNINGS: Repsol, OMV, Suncor

Singapore 380 cSt

Nov18 - 478.00 / 480.00

Dec18 - 469.25 / 471.25

Jan19 - 461.25 / 463.25

Feb19 - 454.75 / 456.75

Mar19 - 449.50 / 451.50

Apr19 - 444.50 / 446.50

Q1-19 - 455.25 / 457.25

Q2-19 - 439.50 / 441.50

Q3-19 - 420.25 / 422.75

Q4-19 - 387.50 / 390.00

CAL19 - 424.75 / 427.75

CAL20 - 355.25 / 361.25

Singapore 180 cSt

Nov18 - 483.75 / 485.75

Dec18 - 476.25 / 478.25

Jan19 - 469.75 / 471.75

Feb19 - 463.75 / 465.75

Mar19 - 459.00 / 461.00

Apr19 - 454.75 / 456.75

Q1-19 - 464.25 / 466.25

Q2-19 - 449.75 / 451.75

Q3-19 - 433.00 / 435.50

Q4-19 - 406.50 / 409.00

CAL19 - 437.75 / 440.75

CAL20 - 377.25 / 383.25

Rotterdam 3.5%

Nov18 - 445.50 / 447.50

Dec18 - 436.75 / 438.75

Jan19 - 430.75 / 432.75

Feb19 - 425.75 / 427.75

Mar19 - 421.50 / 423.50

Apr19 - 417.25 / 419.25

Q1-19 - 426.00 / 428.00

Q2-19 - 412.50 / 414.50

Q3-19 - 392.75 / 395.25

Q4-19 - 358.50 / 361.00

CAL19 - 396.75 / 399.75

CAL20 - 335.25 / 341.25

0.1% Rott barges Gasoil

Nov18 - 694.34 / 696.34

Dec18 - 687.29 / 689.29

Jan19 - 684.53 / 686.53

Feb19 - 682.86 / 684.86

Mar19 - 681.06 / 683.06

Apr19 - 679.36 / 681.36

Q1-19 - 682.81 / 684.81

Q2-19 - 679.79 / 681.79

Q3-19 - 683.30 / 685.80

Q4-19 - 679.12 / 682.12

CAL19 - 683.30 / 684.44

Sing GO 10ppm

Nov18 - 93.16 / 93.36

Dec18 - 92.25 / 92.45

Jan19 - 91.82 / 92.02

Feb19 - 91.58 / 91.78

Mar19 - 91.54 / 91.74

Apr19 - 91.51 / 91.71

Q1-19 - 91.64 / 91.84

Q2-19 - 91.52 / 91.72

Q3-19 - 91.70 / 91.90

Q4-19 - 91.91 / 92.11

CAL19 - 91.69 / 91.89


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