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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  

Albert Park vessel. Bureau Veritas marks naming of Union Maritime's wind-assisted Aframax tanker  

Albert Park, fitted with three WindWings sails, is Chinese yard's first wind-assisted Aframax product tanker.

Maersk Halifax ship-to-ship (STS) ethanol bunkering operation. Singapore completes world's largest ethanol bunkering operation  

Maersk, Golden Island and PSA perform ethanol bunkering in Singapore, drawing on methanol handling experience and safety protocols.

WinGD Global Service personnel. WinGD signs five-year service deal for NYK LNG carrier fleet  

Swiss engine designer WinGD will support ten dual-fuel engines across five Japanese-operated LNG carriers.

Steel-cutting ceremony for vessel with builder's hull no. N1036. Steel cut for third methanol-ready chemical tanker in ROC-Essberger series  

Chemical tanker series is designed with provisions for methanol fuel and wind-assisted propulsion systems.

Tangier Maersk vessel. WinGD engine completes first in-service ethanol voyage on Maersk container ship  

Tangier Maersk sails from Houston to New York using 100% bioethanol in WinGD's X-DF-M/E engine.

Platform supply vessel (PSV) render. Breeze Ship Design wins contract for Union Vega Offshore's battery-hybrid PSVs  

Two battery-hybrid platform supply vessels, with options for four more, will be built in China.

GRSE and ONGC contract signing. GRSE signs contract with ONGC to build four hybrid platform supply vessels  

Indian shipbuilder adds offshore support vessels to its portfolio with hybrid propulsion contract for state oil firm.

Felicitas vessel. AMS Barging christens methanol-ready tanker as fleet reaches 17 vessels  

Dutch inland shipping company adds 9,000-cbm diesel-electric tanker Felicitas, designed for future conversion to methanol bunkering.

Estonia's fully-electric ferry render. Steerprop to supply next-generation CRP units for Estonia's first electric ferry  

Finnish propulsion specialist Steerprop will equip a CRIST-built electric ferry with upgraded contra-rotating propeller technology for the Estonian State Fleet.

BGN and HD HHI contract signing. BGN orders four more dual-fuel LPG carriers from HD Hyundai Heavy Industries  

New contract brings BGN's 2026 orders with HD HHI to 10 vessels and will increase its owned VLGC fleet to 23 ships.


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