Crash of the Titans: Fuel oil trading houses 'betting against each other'

[Runifyouhaveto]

Fuel oil trading houses 'betting against each other'
http://www.bunkerworld.com/news/Fuel-oil-trading-houses-betting-against-each-other-136901

Reports say "unprecedented volumes" of fuel oil are being traded in the Singapore market. "This time round it's a serious play," a Singapore-based veteran oil trader with at least 10 years of experience in the industry told Reuters on Monday.

Strong buying was led by Swiss-based Glencore and Mercuria, China's PetroChina, and oil major BP.
Russian major Lukoil, Swiss-based traders Gunvor and Vitol, and French oil major Total were the main sellers.



Which banks are financing these trades?

 

[mojito]

Silly article. Some people buying, some people selling, this is normal. Everybody sell, nobody buy, now somebody will get hurt. As long as buyers can keep buying, lenders keep lending, no problem.

 

[Runifyouhaveto]

Nick Leeson: [looking into the mirror] I, Nicholas Leeson, have lost 50 million quid... IN ONE DAY!

 

[Runifyouhaveto]

Some people buying, some people selling, this is normal.

Showdown sets trading records in Singapore's fuel oil market
http://www.reuters.com/article/2015/06/08/singapore-fueloil-trading-idUSL5N0YR01O20150608
More than $750 million of physical cargoes have been traded in the first week of June during an end-of-day pricing window, accounting for about 60 percent of Singapore's average monthly sales of the fuel and creating logistics challenges at the port.

"This time round it's a serious play," With profit and loss stakes at more than tens of millions, market sources said emotions in the market are riding high.


Related: http://www.platts.com/latest-news/o...e-daily-fuel-oil-trading-volume-hits-26109999
The daily volume of FOB Singapore high sulfur fuel oil cargoes traded during the Platts Market on Close assessment process hit a record high Tuesday. A total volume of 580,000 mt was bought and sold during the Platts MOC process Tuesday, representing a 45% jump compared with the previous daily record volume of 400,000 mt traded on October 2, 2013.

 

[syed putra]

energy price drop, so maybe some power plants find it cheaper to burn fuel oil instead of coal or LNG. who knows.

 

[Runifyouhaveto]

Remembering the China Aviation Oil Scandal in 2004
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUYK4734iusU

The company engaged in speculative trading on oil prices, and ran up losses as the price of crude oil traded in New York rose as high as $55.17 a barrel, a record at the time.

The derivatives loss was the biggest in Singapore since Leeson caused the 1995 collapse of Barings Plc. The jet-fuel trader would have reported a pretax loss of S$379 million for the nine months ended September 2004 instead of a profit of S$49.6 million. China Aviation Oil was named Singapore's most transparent company by the island's Securities Investors Association in 2002.




1985 - Pan El Crisis
1995 - Barings Bank
2004 - China Aviation Oil
2015 - ?
Every decade, this kind of problem hits our local financial market.
Don't ruin our SG50 year.

 

[Runifyouhaveto]

1985 Pan El Crisis
http://en.wikipedia.org/wiki/Pan-Electric_Industries

Pan-Electric Industries was a Singapore-based company that specialised in marine salvage work, and had 71 subsidiary companies, including hotel and property interests, with a market capitalization of S$230 million.The company collapsed in 1985 due to unsettled forward contracts, forcing the stock exchanges of both Singapore and Malaysia to shut down for three days.

As of 2000, it remains the largest corporate collapse in Singapore's history, and the only instance where the Stock Exchange of Singapore (SES) had to close. The Malaysian Kuala Lumpur Stock Exchange was also forced to close for three days as a result.

 

[dancingshoes]

Fuel oil trading houses 'betting against each other'
http://www.bunkerworld.com/news/Fuel-oil-trading-houses-betting-against-each-other-136901

Reports say "unprecedented volumes" of fuel oil are being traded in the Singapore market. "This time round it's a serious play," a Singapore-based veteran oil trader with at least 10 years of experience in the industry told Reuters on Monday.

Strong buying was led by Swiss-based Glencore and Mercuria, China's PetroChina, and oil major BP.
Russian major Lukoil, Swiss-based traders Gunvor and Vitol, and French oil major Total were the main sellers.



Which banks are financing these trades?

i think that they are finding ways to generate more revenue as oil price dipped and there are no better ways to make more money other than betting among themselves.

 

[dancingshoes]

http://www.reuters.com/article/2015/06/08/singapore-fueloil-trading-idUSL5N0YR01O20150608


* Over $750 million worth of fuel oil traded 1st week of June

* Trading frenzy leads to record price swing

* Monthly volume record for 380-centistroke's set to fall

* Singapore's port logistics to be tested by huge volumes

 

[Runifyouhaveto]

Glencore in Singapore fuel oil spree as cargo premium slumps
http://www.businesstimes.com.sg/ene...gapore-fuel-oil-spree-as-cargo-premium-slumps

 

[Runifyouhaveto]

Strong buying was led by Swiss-based Glencore and Mercuria, China's PetroChina, and oil major BP.
Russian major Lukoil, Swiss-based traders Gunvor and Vitol, and French oil major Total were the main sellers.




Which banks are financing these trades?

Latest: Weekly imports of residual fuel into Singapore in the week to June 10 nearly tripled to hit the highest since October 2013, led by a jump in shipments from Russia, data from IE Singapore showed today
http://www.todayonline.com/singapore/singapores-weekly-fuel-oil-imports-hit-highest-oct-2013

fierce

 

[Runifyouhaveto]

"The market is flooded with oil and everyone is desperate to sell quickly, so you have a price war," said a Singapore-based trader.
Marine fuel prices at weakest since Sept 2013
Singapore fuel oil inventory highest in over 15 years
http://af.reuters.com/article/energyOilNews/idAFL3N0YX1RT20150616

 

[gingerlyn]

I have a simple question here.
if market is flooded with oil, why the price is so expensive and why the prices do not drop to 30 dollars a barrel

 

[dancingshoes]

oil like gold has a support, if they break the support, how about the cost of oil mining and production. they need to take care of this bottomline too.

I have a simple question here.
if market is flooded with oil, why the price is so expensive and why the prices do not drop to 30 dollars a barrel

 

[Runifyouhaveto]

Singapore 500 ppm gasoil differential dives to lowest since Jan 2013 on supply pressure
Singapore (Platts)--17Jun2015
http://www.platts.com/latest-news/o...500-ppm-gasoil-differential-dives-to-27517988

 

[Runifyouhaveto]

Traders: Singapore Set for a Bunker Price War, Market is Flooded with Oil
http://shipandbunker.com/news/apac/...a-bunker-price-war-market-is-flooded-with-oil
"The market is flooded with oil and everyone is desperate to sell quickly, so you have a price war," a Singapore-based trader told Reuters.

 

[Runifyouhaveto]

Loading delays at the port have also reportedly caused two companies to be temporarily banned from Platts' daily market-on-close (MOC) price assessment process, but Platts was said to have declined to comment on the matter.

Shipbrokers told Reuters that traders including Glencore's ST Shipping and Petrochina's Chinaoil have hired 28 tankers on a short-term basis, possibly to store excess oil. Another broker stated a further 10-18 vessels are loaded with fuel oil but unable to find buyers, and up to a dozen clean tankers have also been retained to load fuel oil.
http://shipandbunker.com/news/apac/...ongested-after-record-fuel-oil-trades-in-june

 

[Runifyouhaveto]

Max 3.5% Sulfur Bunkers dropped 17% in Singapore within 2-months

 

[winnipegjets]

We need a major disaster to test the mettle of the PAP and show sinkees what incompetents we have in government.

 

[Runifyouhaveto]

2 Million Barrels of Iranian Oil Heading to Singapore in First Move Since Sanctions Deal
http://shipandbunker.com/news/world...-singapore-in-first-move-since-sanctions-deal

"Iran is currently storing as much as 51.4 million barrels of crude in floating storage in its waters. Today's developments could be the start of a flood of oil coming onto the market, putting significant downward pressure on prices. Prepare for crude falling as low as $30 per barrel"