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Mon 29 Jan 2018, 09:13 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude futures held above $70 per barrel, but were down by $19 cents from their last close at $70.34 a barrel at 07:49 GMT. U.S. WTI crude futures were at $66.19 a barrel, up $5 cents. Fantastic scenes from Roger Federer at the Australian Open, somehow he just manages to keep on going. It's a bit like the oil market, surely it just can't keep on going up, when will the reality of the situation bring it crashing down? The story of the U.S. dollar is an interesting factor, too. I've been so used to it at $1.3 to the pound that checking the level was a surprise up at $1.42. The description of U.S. fiscal policy as 'loose' by the media is a kind description and the resulting weakening of the currency seems to go against the aims of the current administration. Again it seems to be a toss up between two factors: the expectation that U.S. production will break the 10mil bpd and the technicals showing that there is still room for more upward movement. (Technical jargon time: there is this wave named after a bloke called Elliott, and he really likes the number 5; the next move up on Brent would signal this 5, proving that everything will move up higher). Think the market has shown a top out level just over $71, and perhaps a correction back to $68 with the emphasis on the U.S. production.

Fuel Oil Market (January 26)

The front crack opened at -11.65, weakening to -11.80, moving back to -11.65, closing at -11.70. The Cal 19 was valued at -16.00.

Asia's front-month visco spread climbed to a near sixmonth high on Friday after nearly three weeks of sustained buying interest, trade and broker sources said.

This came despite limited signs of narrowing low-viscosity fuel oil supplies, according to some industry participants. Earlier in January, the front-month visco spread sank to a near two-year low amid declining demand for lowviscosity fuel oils after Pakistan said it had indefinitely suspended fuel oil imports.

Fuel oil stocks in the ARA oil hub jumped 28 percent, or 232,000 tonnes, from the previous week to a five-week high of 1.048 million tonnes in the week ended Jan. 25, data from Dutch consultancy PJK International showed. A closed arbitrage from Europe to Asia Pacific drove fuel oil stocks higher.

Economic Data and Events

* Chatham House Middle East & North Africa Energy conference, London; speakers include Iraq Oil Minister Jabbar Al-Luaibi, Libya National Oil Corp. Chairman Mustafa Sanalla, ENI CEO Claudio Descalzi; 1st day of 2

* Oseberg loading program for March

* BHGE annual meeting, Florence, featuring executives from Saudi Aramco, Shell, EnQuest, Rosneft, Eni, 1st day of 2

* Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday's EIA report

Singapore 380 cSt

Feb18 - 382.50 / 384.50

Mar18 - 382.50 / 384.50

Apr18 - 382.00 / 384.00

May18 - 381.50 / 383.50

Jun18 - 380.75 / 382.75

Jul18 - 379.50 / 381.50

Q2-18 - 381.25 / 383.25

Q3-18 - 377.50 / 379.50

Q4-18 - 372.00 / 374.50

Q1-19 - 362.75 / 365.25

CAL19 - 322.50 / 325.50

CAL20 - 255.25 / 260.25

Singapore 180 cSt

Feb18 - 388.50 / 390.50

Mar18 - 388.25 / 390.25

Apr18 - 388.00 / 390.00

May18 - 387.50 / 389.50

Jun18 - 386.75 / 388.75

Jul18 - 385.50 / 387.50

Q2-18 - 387.25 / 389.25

Q3-18 - 383.75 / 385.75

Q4-18 - 378.00 / 380.50

Q1-19 - 368.75 / 371.25

CAL19 - 330.50 / 333.50

CAL20 - 264.50 / 269.50

Rotterdam Barges

Feb18 368.00 / 370.00

Mar18 369.00 / 371.00

Apr18 368.75 / 370.75

May18 368.00 / 370.00

Jun18 367.00 / 369.00

Jul18 365.50 / 367.50

Q2-18 368.00 / 370.00

Q3-18 363.00 / 365.00

Q4-18 352.75 / 355.25

Q1-19 342.50 / 345.00

CAL19 301.50 / 304.50

CAL20 226.50 / 231.50

ABB   BP  

E-fuels volumes per country. Europe risks falling behind China in race to produce e-fuels for shipping  

Europe has 69 e-fuel projects but only six are operational, while China is scaling rapidly.

Hiring concept with highlighted candidate. Sing Fuels opens applications for junior bunker trader role  

Singapore-based firm seeks candidates with one to two years of experience in marine fuels or the wider maritime industry.

Eleven Energy logo. Eleven Energy eyes Athens expansion with trader hire  

Riyadh-headquartered firm looking to open its second office in Europe.

Scorpio team with representatives from Monaco's Department of Economic Development. Monaco backs Scorpio Ship Management in European hydrogen propulsion project  

Government co-finances Scorpio’s role in Project Mariner as Europe pushes to develop hydrogen propulsion technology for commercial shipping.

Arlon vessel. Exmar takes delivery of second dual-fuel ammonia carrier at HD Hyundai Heavy Industries  

Arlon is second in a planned series of four ammonia dual-fuel midsize gas carriers.

Singapore Marina Bay skyline. IBT Bunkering & Trading launches Singapore desk to complement Hamburg operation  

German bunker firm says the move gives it round-the-clock coverage across two continents.

Maritime and Port Authority of Singapore logo. Singapore awards eight new LNG bunkering licences ahead of September launch  

The Maritime and Port Authority of Singapore is expanding the city-state’s LNG bunkering capacity with eight new five-year licences.

Launching ceremony of Maran Melina. New Times Shipbuilding launches two LNG dual-fuel crude oil tankers for Maran and Capital Ship  

Two 155,500-dwt LNG dual-fuel tankers floated out for Greek shipping groups.

Lem Azalea and Lem Plumeria naming ceremony. Naming ceremony held for Huangpu Wenchong's first methanol dual-fuel bulkers  

Two 65,000-tonne vessels built for Limassol-based Lemissoler Navigation.

TSS Challenger vessel. Damen launches second CSOV 9020 for TSSM, prepared for future methanol operation  

The vessel, to be named TSS Challenger, is due for delivery in early 2027.


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