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Thu 3 May 2018 07:55

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed last night at $73.36 up $0.23 and WTI closed up $0.68 to settle at $467.93. Let me tell you a story about logic. My daughter once told me that she was learning about Henry VIII and his six wives at school. The class had to memorise all six of Henry's wives and my daughter could not understand at all why this was important. What is the point of learning about the original gangster and why he had six wives? She wants to learn about how to look at trading patterns or developing a new social media app or something. This was a very valid question. But, I said to her in a bout of wisdom, that Henry VIII single-handedly changed the face of British politics and set up the Church of England as the Catholic faith wouldn't allow him to get divorced and remarry. It's not about his six wives but about looking at history's issues and how they were solved, which will give you in turn a broader understanding of life. She said, "OK thanks Dad, interesting". Now what has this got to do with the oil market? Well, I'll tell you. If she were to say to me: "Dad, I see US crude stocks went up by 6mn bbls and gasoline stocks also rose, but why did the price go up?" To that, I would have no answer. And it's because the market is insane. Does anyone know why the oil market went up last night? US production is at record highs, crude and gasoline stocks are up, yet we actually closed UP! At one point we traded at $72.37 before rebounding, why? Honestly sometimes I'd rather be Anne Boelyn than I would opine on this market. Off with their heads!! Watch the fed. Watch cable. Watch everything...Good day.

Fuel Oil Market (May 2)

The crack was -12 at the close ranging from a strong start up to -11.55 before retracing at the close to -12. Market firms on tight supply outlook, rising demand - Bullish sentiment fuelled by expectations of tight near-term supplies and rising seasonal demand helped boost the promptmonth 380 cSt time spread and fuel oil crack, This came amid ongoing refinery maintenance in Russia as well as upcoming refinery maintenance in Iran which limit fuel oil output as well as fewer exports to Asia from the Middle East to Asia amid rising seasonal demand for power generation, sources said. "Iran ... is gearing up for 0.15 million barrels per day of refinery turnarounds in May, the heaviest since November 2017,"

Economic Data and Events: (Times are London.)

* Japan on holiday

* Russian refining maintenance schedule from ministry

* PJK weekly report on European oil product inventories in ARA region

* EARNINGS: OMV AG

Singapore 380 cSt

Jun18 - 398.50 / 400.50

Jul18 - 395.25 / 397.25

Aug18 - 392.00 / 394.00

Sep18 - 388.75 / 390.75

Oct18 - 385.50 / 387.50

Nov18 - 382.50 / 384.50

Q3-18 - 392.00 / 394.00

Q4-18 - 383.50 / 385.50

Q1-19 - 373.00 / 375.50

Q2-19 - 362.50 / 365.00

CAL19 - 338.75 / 341.75

Singapore 180 cSt

Jun18 - 410.50 / 412.50

Jul18 - 407.25 / 409.25

Aug18 - 403.75 / 405.75

Sep18 - 400.25 / 402.25

Oct18 - 397.00 / 399.00

Nov18 - 393.75 / 395.75

Q3-18 - 403.75 / 405.75

Q4-18 - 395.00 / 397.00

Q1-19 - 384.75 / 387.25

Q2-19 - 374.50 / 377.00

CAL19 - 353.00 / 356.00

Rotterdam Barges

Jun18 - 384.25 / 386.25

Jul18 - 381.00 / 383.00

Aug18 - 377.50 / 379.50

Sep18 - 373.75 / 375.75

Oct18 - 369.25 / 371.25

Nov18 - 364.75 / 366.75

Q3-18 - 377.25 / 379.25

Q4-18 - 365.00 / 367.00

Q1-19 - 354.50 / 357.00

Q2-19 - 342.25 / 344.75

CAL19 - 317.50 / 320.50



Philippe Berterottière and Matthieu de Tugny. GTT unveils cubic LNG fuel tank design for boxships with BV approval  

New GTT CUBIQ design claims to reduce construction time and boost cargo capacity.

Wilhelmshaven Express, Hapag-Lloyd. Hapag-Lloyd secures multi-year liquefied biomethane supply deal with Shell  

Agreement supports container line's decarbonisation strategy and net-zero fleet operations target by 2045.

Dual-fuel ship. Dual-fuel vessels will dominate next decade, says Columbia Group  

Ship manager predicts LNG-powered vessels will bridge gap until zero-carbon alternatives emerge.

Stril Poseidon vessel. VPS campaign claims 12,000 tonnes of CO2 savings across 300 vessels  

Three-month efficiency drive involved 12 shipping companies testing operational strategies through software platform.

Birdseye view of a ship. Gard warns of widespread cat fines surge in marine fuel  

Insurer reports elevated contamination levels, echoing VPS circular in early September.

Christoffer Ahlqvist, ScanOcean. ScanOcean opens London office to expand global bunker trading operations  

New office will be led by Christoffer Ahlqvist, Head of Trading.

Aurora Expeditions' Sylvia Earle. Aurora Expeditions claims 90% GHG reduction in landmark HVO trials  

Sylvia Earle said to be the first Infinity-class ship to trial HVO biofuel.

Molslinjen ferry illustration. Wärtsilä wins contract for electric propulsion systems on two Danish ferries  

Technology group to supply integrated electric systems for Molslinjen's battery-electric catamarans.

Manja Ostertag, Bunker Holding. Bunker Holding executive to address biofuels at Berlin event  

Manja Ostertag will discuss production scaling and supply chain integration at September forum.

Svitzer Ingrid tugboat naming ceremony. Denmark's first electric tug named as Svitzer advances decarbonisation goals  

Svitzer Ingrid said to reduce annual CO₂ emissions by 600-900 tonnes using battery power.


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