Fri 12 Jan 2018 09:08

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude futures were at $68.97 a barrel, down 29 cents, or $0.4 percent, from their last close. Brent also marked a December 2014 high the previous day, at $70.05 a barrel. U.S. WTI crude futures were at $63.34 a barrel at 07:55 GMT, down 46 cents, or $0.7 percent, from their last settlement. WTI the day before rose to its strongest since late 2014 at $64.77. Well yesterday afternoon surprised with the move it has been threatening for a few days now: it touched the $70 mark. But like market brain freeze, the heights of the market kicked in and screamed "I DON'T LIKE IT THIS HIGH", as though traders had acute acrophobia suddenly come over them. I think the U.S. deserves a gold star too, having come from a position of almost destruction after the price squeeze by OPEC to now being China's largest oil customer. Impressive. They are the crude market equivalent of the nerdy spotty kid at school who had no friends, who ends up setting up a revolutionary company and selling it to a tech giant for millions, swan around with all the celebs, and have more super cars than you have credit cards. Anyway, this market... we are sure to be in a new range of $65-70, with technical helping us up to these levels (do bear in mind that yesterday the next resistance level was at over $75). Yes, U.S. production is up; yes, the OPEC cut - if you look deeper at the numbers - doesn't constitute too much of a cut; yes, the demand increase is as elusive as the Loch Ness Monster, BUT stocks are down off their highs, OPEC compliance is good, the world economy is growing... positives outweigh the negatives - that has to be it or this market is broken. 'Yes, you can have a pay rise' sounds so much better than a 'no'. Admit it, the fallibility of human nature has pushed up this market. Maybe I have been blinded by the numbers beforehand, but you cannot deny the positive feel to this market.

Fuel Oil Market (January 11)

The front crack opened at -11.30, strengthening to -11.00, weakening to -11.20. The Cal 19 was valued at -11.90.

Asia's fuel oil markets firmed on Thursday after official data showed a sharp drop in Singapore onshore inventories of the residual fuel, reversing a recent downward trend in time spreads and refining margins of the fuel. Singapore weekly inventories fell 13.5% to a seven-month low of 19.66 million barrels (or about 2.934 million tonnes) in the week ended Jan. 10. This came as net fuel oil imports into Singapore fell 43 percent from the week before to a two-week low of 825,000 tonnes.

Marine fuel prices are expected to rise through to 2019 as demand for the fuel, also known as bunkers, remains steady amid increases in global trade volumes, said BMI Research in a note to clients. The longer-term trend in marine fuel prices will be driven by the IMO decision to cap the amount of sulphur in shipping fuels at the start of 2020.

Economic Data and Events

* 1:30pm: U.S. CPI m/m, Dec.

* 1:30pm: U.S. Retail Sales, Dec.

* 1:30pm: U.S. Real Avg Weekly Earnings, Dec.

* 6pm: Baker Hughes U.S. Rotary Gas Rigs, period Jan 12, prior 182

* 6pm: Baker Hughes U.S. Rotary Oil Rigs, period Jan 12, prior 742

* 6pm: Baker Hughes U.S. Rig Count, period Jan 12, prior 924

* 8:30pm: Commodity Futures Trading Commission weekly scheduled report on futures and options positions

Singapore 380 cSt

Feb18 - 377.25 / 379.25

Mar18 - 377.75 / 379.75

Apr18 - 377.50 / 379.50

May18 - 377.25 / 379.25

Jun18 - 376.75 / 378.75

Jul18 - 376.25 / 378.25

Q2-18 - 377.25 / 379.25

Q3-18 - 375.25 / 377.25

Q4-18 - 371.25 / 373.75

Q1-19 - 363.50 / 366.00

CAL19 - 341.75 / 344.75

CAL20 - 290.25 / 295.25

Singapore 180 cSt

Feb18 - 381.75 / 383.75

Mar18 - 382.75 / 384.75

Apr18 - 382.50 / 384.50

May18 - 382.50 / 384.50

Jun18 - 382.00 / 384.00

Jul18 - 381.75 / 383.75

Q2-18 - 382.25 / 384.25

Q3-18 - 380.75 / 382.75

Q4-18 - 377.25 / 379.75

Q1-19 - 371.25 / 373.75

CAL19 - 350.25 / 353.25

CAL20 - 299.25 / 304.25

Rotterdam Barges

Feb18 364.75 / 366.75

Mar18 365.50 / 367.50

Apr18 366.00 / 368.00

May18 365.50 / 367.50

Jun18 364.75 / 366.75

Jul18 363.50 / 365.50

Q2-18 365.50 / 367.50

Q3-18 362.25 / 364.25

Q4-18 354.50 / 357.00

Q1-19 346.50 / 349.00

CAL19 321.25 / 324.25

CAL20 271.25 / 276.25


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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