Mon 12 Feb 2018 09:59

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed Friday down 2.02 to $62.79, WTI closed at $59.20 down 1.95. It's that time again - The Winter Olympics. The Winter Olympics comes around every four years. This time four years ago, Brent was trading at $108.79 per bbl. $46 per bbl higher than we are today. What followed in the winter of 2014 was certainly the winter of discontent, and one year after the Sochi Olympics Brent was trading nigh on exactly where are now. I wonder if the turn of PyeongChang to host the Winter Olympics will bring with it a turnaround in fortune? Well, in the same way Mike Pence dismissed a dinner invitation, I think I will dismiss the notion that Brent will go back up to the levels we saw Brent trading in Sochi. The US rig count jumped substantially last week - up 26 oil rigs - which should be no surprise to anyone. US oil production is climbing as I and many others predicted it would, and I don't see how that really will change considering the monumental shift in trading agenda the US oil market in general has showed us over the last 12 months. I am frankly amazed at the level of headline space that has been given considering US are now the second biggest crude oil producer in the world. They have over taken Saudi Arabia in the same astonishing way that Norwegian bloke did yesterday when he won the cross-country skiathlon gold medal. In fact, I am going to call the increase in US oil production the "Kruger" effect. They have come from way behind the pack, in a very short amount of time to pretty much close to the top. Kruger I salute you. Both of you.

Fuel Oil Market (February 9)

The front crack opened at -10.20, weakening to -10.25, before strengthening to -9.95. The Cal 19 was valued at - 14.50.

Asia's fuel oil market was muted on Friday but ended the week lower as inventories of the residual fuel across key global storage hubs posted weekly gains.

An absence of buying interest for 380 cSt fuel oil cargoes in the Singapore trading window saw cash premiums of the fuel slip for a fourth session straight on Friday to 17 cents a tonne to Singapore quotes, down from a $1.12 a tonne premium on Monday.

The 380 cSt prompt-month time spread was steady on Friday at a premium of 25 cents a tonne, but lower from Monday's premium of 50 cents a tonne.

Fuel oil in the ARA rose 3%, or 25,000 tonnes, from the previous week to a two-week high of 932,000 tonnes in the week ended Feb. 8.

Economic Data and Events

* ~11am-12pm: OPEC releases Monthly Oil Market Report

* 7pm: EIA releases monthly Drilling Productivity Report

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

* Caspian CPC, Azeri Supsa crude programs for March

* Egypt Petroleum Show in Cairo, with speakers including OPEC Secretary General Mohammad Barkindo, Eni SpA CEO Claudio Descalzi, BP CEO Bob Dudley, among others, 1st day of 3

* World Government Summit, Dubai, 2nd day of 3

Singapore 380 cSt

Mar18 - 351.50 / 353.50

Apr18 - 351.25 / 353.25

May18 - 351.25 / 353.25

Jun18 - 350.75 / 352.75

Jul18 - 349.75 / 351.75

Aug18 - 348.50 / 350.50

Q2-18 - 351.00 / 353.00

Q3-18 - 348.50 / 350.50

Q4-18 - 343.75 / 346.25

Q1-19 - 335.75 / 338.25

CAL19 - 303.50 / 306.50

CAL20 - 235.75 / 240.75

Singapore 180 cSt

Mar18 - 357.00 / 359.00

Apr18 - 357.00 / 359.00

May18 - 357.25 / 359.25

Jun18 -356.50 / 358.50

Jul18 - 355.75 / 357.75

Aug18 - 354.50 / 356.50

Q2-18 - 357.00 / 359.00

Q3-18 - 354.75 / 356.75

Q4-18 - 350.50 / 353.00

Q1-19 - 344.00 / 346.50

CAL19 - 312.25 / 315.25

CAL20 - 246.25 / 251.25

Rotterdam Barges

Mar18 337.75 / 339.75

Apr18 338.00 / 340.00

May18 337.75 / 339.75

Jun18 336.75 / 338.75

Jul18 335.50 / 337.50

Aug18 333.75 / 335.75

Q2-18 337.50 / 339.50

Q3-18 334.00 / 336.00

Q4-18 325.50 / 328.00

Q1-19 317.00 / 319.50

CAL19 280.00 / 283.00

CAL20 219.00 / 224.00


Lease agreement between Inter Terminals Sweden and the Port of Gothenburg, signed on July 1st. Pictured: Göran Eriksson, CEO of the Port of Gothenburg (left) and Johan Zettergren, Managing Director of Inter Terminals Sweden (right). New Gothenburg lease an opportunity to expand green portfolio: Inter Terminals  

Bunker terminal operator eyes tank conversion and construction projects for renewable products.

Map of US Gulf. Peninsula extends US Gulf operation offshore  

Supplier to focus on Galveston Offshore Lightering Area (GOLA) in strategy to serve growing client base.

The M/T Jutlandia Swan, operated by Uni-Tankers. Uni-Tankers vessel gets wind-assisted propulsion  

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.


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