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APEX Fuel Oil Futures Contract executes first ‘Exchange of Futures for Physicals’ op

07 Aug 2019

Singapore-based derivatives exchange Asia Pacific Exchange (APEX) has successfully facilitated the first Exchange of Futures for Physicals (EFP) for the APEX Fuel Oil Futures Contract FO1909 on Tuesday (6 August).

A total of 3,000 metric tonnes (mt) of 380cst Fuel Oil was transacted through the EFP facility.

As recent Fuel Oil spot prices experienced large fluctuations, Ocean Energy and a local trader engaged in the Exchange of Futures for Physical (EFP) of APEX380 Fuel Oil Futures Contract, converting 300 lots of FO1909 Contracts into 3,000 mt of physical fuel oil. Subsequently, the fuel oil was sold to Sinopec Fuel Oil (Singapore) Pte Ltd.

Since its listing on 11 April 2019, the Average Daily Volume (ADV) has been around 26,000 lots (260,000 mt) and Open Interest was around 5,500 lots (55,000 mt).

In light of the IMO2020 regulations, both the energy and shipping industries are expected to face huge challenges from the potential volatility of fuel oil prices.

Moving forward, APEX says it is planning to launch a Low Sulphur Fuel Oil (LSFO) Futures Contract.

“APEX is in the midst of discussions with major international oil companies and is expected to launch the contract in the near future,” it states.

APEX is the third exchange approved by the Monetary Authority of Singapore with the “Approved Exchange” and “Approved Clearing House” license.

To date, APEX has four listed contracts, comprising of Energy, Agricultural and Financial products. In addition to EFP, the delivery methods of APEX contracts include the APEX Warehouse Receipt Delivery, FOB Delivery and cash settlement.

Related: Singapore: Asia Pacific Exchange officially launches 380 cSt fuel oil futures contract
Related: Singapore: APEX holds Fuel Oil Futures Cocktail Reception

Photo credit: Asia Pacific Exchange
Published: 8 August, 2019


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