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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  

KEYS Azalea vessel. KEYS Azalea completes 100th LNG bunkering operation in western Japan  

LNG bunkering vessel reaches landmark delivery in two and a half years.

STS bunkering operation at Port of Santos. Port of Santos moves to regular ethanol bunkering for ships  

CMA CGM, Copersucar and Bunker One expand July pilot into a commercial supply chain for ethanol as a marine fuel in Brazil

Balearia's electric fast ferry. Baleària floats first fully electric fast ferry for Tarifa–Tangier route  

Spanish operator's new catamaran, built at Armón's Gijón yard, will enter service in summer 2027.

Tsurugidake vessel. Kawasaki Heavy Industries delivers fourth LNG-fuelled VLCC  

The 309,000-tonne Tsurugidake, built at a joint-venture shipyard in Dalian, is designed to cut CO₂ emissions by up to 30% when running on LNG.

KRISO and KOMSA sign MoU. South Korean agencies link up on green shipping data and monitoring tech  

KRISO and KOMSA sign an MOU to share demonstration data and remote monitoring capabilities for eco-friendly vessels.

Peninsula logo. Peninsula seeks sales trader for Singapore bunker fuel desk  

Role suited to candidates with prior sales or trading experience, ideally within the maritime or energy sector.

Titan Optimus alongside Peony Leader vessel. FuelEU pooling drives surge in bio-LNG demand, Titan analysis finds  

Clean fuel supplier's modelling shows pooling mechanism turning overcompliance into tradable value for LNG-fuelled ships.

Keith Johnstone, Lloyd’s Register. Ports told to prepare now for advanced nuclear power  

Joint paper sets out a readiness pathway for ports facing nuclear-powered vessels, floating reactors and small modular units

Terra Clove vessel. Eastern Pacific Shipping takes delivery of first ammonia dual-fuel VLAC  

Terra Clove powered by first Everllence B&W 6G60ME-C10.5-LGIA ammonia dual-fuel two-stroke engine.

BV grants type approval to WinGD. Bureau Veritas approves WinGD's variable compression ratio technology for dual-fuel engines  

Classification society grants type approval to engine technology enabling compression ratio adjustment across different marine fuels.


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