Tue 21 Nov 2017 09:01

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude futures, the international benchmark for oil prices, were at $62.20 per barrel at 03:01 GMT, $8 cents above their last close, and U.S. WTI crude futures were at $56.50 a barrel, also up $8 cent from their last settlement. Come on people, the market is boring enough without trotting out the same headlines over and over again. 'Oil prices steady as rising U.S. output undermines OPEC cuts', 'Market waits for OPEC meeting'. Some interesting points not being talked about in these stories, oil hipster time. U.S. rig count remained unchanged. It wasn't long ago that people were losing their minds over the increasing rig count; why has this not gone to the moon with the increasing crude price? We've hardly had any movement since breaking through the $60 level. This is an important point to dwell on, especially with the news that ConocoPhillips is looking to invest all its new project money in shale oil. The implications of the IMO 2020 regulations are going to start to impact the market, and I bet if you are a tanker owner you are wringing your hands as there is going to be a lot of refined product that needs to be transported to ports to cater for the new demand. Goodie for you. WTI is looking like the younger brother of Brent who has now grown up and is far bigger and better. Its problems of investment for capacity increases and readjusting trade routes will have a profound effect on the market. Yes OPEC cut, yes inventories, blah blah, we get it and know it. But if you want to stay ahead of the curve, there's plenty of other things we could be taking about.

Fuel Oil Market (November 20)

The front crack opened at -7.95, weakening to -8.00, before strengthening to -7.90, ending -8.00. The Cal 18 was valued at -7.85.

The second-month EW arbitrage spread of 380 narrowed to a near two-month low as arrivals into Singapore through December are expected to improve.

Recently, weaker fuel oil prices in northwest Europe due to rising Russian fuel oil exports after the conclusion of the refinery maintenance season there, as well as relatively weaker tanker charter rates, have encouraged some suppliers to lock in fresh supplies into Singapore

Total fuel oil flows into East Asia for November were poised to close at nine-month high of around 7 million tonnes, boosted by recovering Western arrivals, near record-high inflows from the Middle East and 11-month high intra-Asia volumes.

Economic Data/Events: (UK times)

* 1:30pm: Chicago Fed Nat Activity Index, Oct.

* 3pm: U.S. Existing Home Sales, Oct.

* 9:30pm: API issues weekly U.S. oil inventory report

Singapore 380 cSt

Dec17 - 361.25 / 363.25

Jan18 - 360.00 / 362.00

Feb18 - 358.75 / 360.75

Mar18 - 357.50 / 359.50

Apr18 - 356.00 / 358.00

May18 - 354.25 / 356.25

Q1-18 - 358.75 / 360.75

Q2-18 - 354.75 / 356.75

Q3-18 - 349.50 / 352.00

Q4-18 - 344.50 / 347.00

CAL18 - 352.25 / 355.25

CAL19 - 317.75 / 322.75

Singapore 180 cSt

Dec17 - 365.25 / 367.25

Jan18 - 364.25 / 366.25

Feb18 - 363.50 / 365.50

Mar18 - 362.75 / 364.75

Apr18 - 361.75 / 363.75

May18 - 361.00 / 363.00

Q1-18 - 363.50 / 365.50

Q2-18 - 361.00 / 363.00

Q3-18 - 356.00 / 358.50

Q4-18 - 351.00 / 353.50

CAL18 - 358.50 / 361.50

CAL19 - 326.50 / 331.50

Rotterdam 380 cSt

Dec17 341.75 / 343.75

Jan18 341.75 / 343.75

Feb18 341.50 / 343.50

Mar18 341.00 / 343.00

Apr18 340.00 / 342.00

May18 339.00 / 341.00

Q1-18 341.50 / 343.50

Q2-18 339.50 / 341.50

Q3-18 334.50 / 337.00

Q4-18 326.00 / 328.50

CAL18 335.25 / 338.25

CAL19 296.75 / 301.75


Marius Kairys, CEO of Elenger Sp. z o.o. Elenger enters Polish LNG bunkering market with ferry refuelling operation  

Baltic energy firm completes maiden truck-to-ship LNG delivery in Gdansk.

Samsung Heavy Industries (SHI) virtual reality (VR) training program developed in collaboration with Evergreen. SHI develops VR training solutions for Evergreen's methanol-fuelled ships  

Shipbuilder creates virtual reality program for 16,500 TEU boxship operations.

Illustratic image of Itochu's newbuild ammonia bunkering vessel, scheduled for delivery in September 2027. Itochu orders 5,000 cbm ammonia bunker vessel  

Japanese firm targets Singapore demonstration after October 2027, with Zeta Bunkering lined up to perform deliveries.

Bunkering of the Glovis Selene car carrier. Shell completes first LNG bunkering operation with Hyundai Glovis in Singapore  

Energy major supplies fuel to South Korean logistics firm's dual-fuel vessel.

Orient Overseas Container Line (OOCL) vessel. CPN delivers first B30 marine gasoil to OOCL in Hong Kong  

Chimbusco Pan Nation claims to be first in region to supply all grades of ISCC-EU certified marine biofuel.

The Buffalo 404 barge, owned by Buffalo Marine Service Inc., performing a bunker delivery. TFG Marine installs first ISO-certified mass flow meter on US Gulf bunker barge  

Installation marks expansion of company's digitalisation programme across global fleet.

Sogestran's fuel supply vessel, the Anatife, at the port of Belle-Île-en-Mer. Sogestran's HVO-powered tanker achieves 78% CO2 reduction on French island fuel runs  

Small tanker Anatife saves fuel while supplying Belle-Île and Île d'Yeu.

Crowley 1,400 TEU LNG-powered containership, Tiscapa. Crowley deploys LNG-powered boxship Tiscapa for Caribbean and Central American routes  

Vessel is the third in company's Avance Class fleet to enter service.

The inland LNG bunker vessel LNG London. LNG London completes 1,000 bunkering operations in Rotterdam and Antwerp  

Delivery vessel reaches milestone after five years of operations across ARA hub.

The M.V. COSCO Shipping Yangpu, China's first methanol dual-fuel containership. COSCO vessel completes maiden green methanol bunkering at Yangpu  

China's first methanol dual-fuel containership refuels with green methanol derived from urban waste.


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