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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


Singapore Port viewed from The Pinnacle@Duxton. Singapore marine fuel sales dip 1.2% in October  

First YoY decline since February as sales of best-selling product fall despite bunker calls rising to second-highest level in port's history.

Daria Sukhanova, PMG Energies. PMG Energies appoints Daria Sukhanova as bunker trader  

Marine fuel business adds trader with over five years of experience to its team.

CMA CGM Salamanque vessel alongside Edison's Ravenna Knutsen vessel. CMA CGM and Edison complete Italy's first STS LNG bunkering for a boxship  

Ship-to-ship operation marks the first time LNG has been delivered to a container vessel in the Adriatic.

Simona Toma, Columbia Group. Columbia Group prioritizes LNG training to build seafarer competence  

Ship manager says LNG knowledge will form the foundation for working safely with future fuels.

Methanol fuel safety guidelines graphic. ClassNK updates methanol fuel guidelines as alcohol-fuelled ship orders rise  

Japanese classification society releases revised safety requirements for methyl and ethyl alcohol-fuelled vessels.

Island Oil Holdings logo. Island Oil seeks front office administrator in Limassol  

Cyprus-based bunker supplier and trader advertises role with benefits including provident fund.

NSU Tubarao vessel. Anemoi completes rotor sail installation on 400,000 DWT ore carrier  

UK firm fits five 35m-tall units on NS United vessel, targeting 6-12% fuel savings.

Liberty Marine Fuels 10-year anniversary graphic. Liberty Marine Fuels marks 10 years in bunker brokering  

Aalborg-based bunker broker celebrates a decade of operations connecting shipowners, charterers, and suppliers.

Charis Chartosias, Island Oil. Island Oil appoints Charis Chartosias as Commercial Development Manager  

Marine fuel trader brings over 14 years' experience to Limassol-based company.

Amalie Møller Simonsen, Malik Supply. Malik Supply appoints HR consultant to support organisational development  

Danish marine fuel trader hires Amalie Møller Simonsen with HR experience at Gjensidige and Netcompany.


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