Mon 29 Jan 2018 09:13

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


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Fourth tanker sails with VentoFoil units as manufacturer says suction wing technology is gaining traction.

Port of Gothenburg Energy Port. Swedish biomethane bunkered in Gothenburg  

Test delivery performed by St1 and St1 Biokraft, who aim to become large-scale suppliers.

Image from Cockett Marine Oil presentation. Cockett to be closed down after 45 years  

End of an era as shareholders make decision based on 'non-core nature' of Cockett's business.

Petrobras logo. Petrobras confirms prompt availability of VLS B24 at Rio Grande  

Lead time for barge deliveries currently five days.

Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.

Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.

Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.

Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

Stanley George, VPS Group Technical and Science Manager, VPS. How to engineer and manage green shipping fuels | Stanley George, VPS  

Effective management strategies and insights for evolving fuel use.


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