Oil and fuel oil hedging market update

Commentary

Brent closed up $0.11 last night to $58.44 and WTI closed at $52.18, down $0.29. Hello Brent/WtI spread. Hello gasoline draws. Hello distillate draws. Albert Einstein once said: "If the facts don't fit the theory then change the facts". That is all I can say to sum things up at the moment. I read about how people are not going to be producing petrol-powered cars and that Mr Taylor said oil demand should peak by 2030, yet IEA claim 2040 is when Asian oil demand will double. I read that Russia are ready to ramp up production if the OPEC agreement doesn't get extended yet the market rallies. I read that the Kurds are willing to put a temporary halt on independence to fight the militants with Iraq, yet the market hasn't adjusted from the rally this conflict caused last week. So what else to do but to throw the towel in and go back to selling my local newspaper "The News Shopper" for 15p? Not a bit of it I'm afraid. Look, I think this market is looking more and more fractured every day. The oil market is never one which is balanced between paper activity 100pct accurately reflecting what is happening fundamentally on the physical side BUT, when certain geopolitical events do crop up, the paper side runs away with them like a 3-year-old running after a helium balloon it has just accidentally released. I see strong resistance at $60 mainly due to the fact that it is probably a number the funds are happy to sell at... and sell they will my friends. Keep a cautious eye.

Fuel Oil Market (October 25)

The front crack opened at -7.80, weakening to -7.95, before strengthening to -7.90. The Cal 18 was valued at -8.10.

Cash premiums of Asia's 180-cst high-sulphur fuel oil gave up gains made in the previous session as buying interest for the lower viscosity fuel oil dried up following a 2017 record volume of cargo deals for the fuel seen in the previous session, trade sources said.

Liquidity in the front-month visco spread was also limited on Wednesday, keeping the swap price differential between the 180 cst and 380-cst fuel oils little changed, broking sources said.

Fujairah fuel oil inventories rose 547,000 barrel (or about 82,000 tonnes) to 9.221 million barrels (1.38 million tonnes) in the week to Oct. 23. Inventories are now at a three-week high but remain below their 2017 weekly average of 10.47 million barrels (or 1.56 million tonnes).

Economic Data/Events: (UK times)

* 9am: Eurozone M3 money supply y/y for Sept., est. 5% (prior 5%)

* 9am: Singapore onshore oil-product stockpile data

* ~Noon: Russian refining maintenance schedule from ministry

* 1:30pm: U.S. wholesale inventories m/m for Sept., prelim., est. 0.4% (prior 0.9%)

* 1:30pm: U.S. initial jobless claims for week ended Oct. 21, est. 235k (prior 222k)

* 1:30pm: U.S. continuing claims for Oct. 14, est. 1,890k (prior 1,888k)

* 2:45pm: Bloomberg U.S. weekly consumer comfort index, Oct. 22, prior 51.1

** Singapore International Energy Week, 4th day of 5

** Africa Oil Week, 4th day of 5

** Angola final crude loading program for Dec.

** Earnings: Statoil, ConocoPhillips, Suncor, Valero, Marathon Petroleum

Singapore 380 cSt

Nov17 - 336.50 / 338.50

Dec17 - 335.00 / 337.00

Jan18 - 333.25 / 335.25

Feb18 - 331.75 / 333.75

Mar18 - 330.50 / 332.50

Apr18 - 329.25 / 331.25

Q1-18 - 332.00 / 334.00

Q2-18 - 328.25 / 330.25

Q3-18 - 323.75 / 326.25

Q4-18 - 319.50 / 322.00

CAL18 - 326.50 / 329.50

CAL19 - 295.50 / 300.50

CAL20 - 265.50 / 272.50

Singapore 180 cSt

Nov17 - 341.25 / 343.25

Dec17 - 340.25 / 342.25

Jan18 - 339.25 / 341.25

Feb18 - 338.00 / 340.00

Mar18 - 337.00 / 339.00

Apr18 - 336.00 / 338.00

Q1-18 - 338.25 / 340.25

Q2-18 - 334.75 / 336.75

Q3-18 - 330.25 / 332.75

Q4-18 - 327.00 / 329.50

CAL18 - 333.25 / 336.25

CAL19 - 304.25 / 309.25

CAL20 - 275.25 / 282.25

Rotterdam 380 cSt

Nov17 317.75 / 319.75

Dec17 314.00 / 316.00

Jan18 313.25 / 315.25

Feb18 313.00 / 315.00

Mar18 312.50 / 314.50

Apr18 312.00 / 314.00

Q1-18 312.75 / 314.75

Q2-18 311.25 / 313.25

Q3-18 306.75 / 309.25

Q4-18 299.50 / 302.00

CAL18 308.75 / 311.75

CAL19 275.75 / 280.7

CAL20 245.00 / 252.00


		Christiania Energy relocates headquarters within Odense Harbour Bunker firm moves to larger waterfront office to accommodate growing team and collaboration needs.

		HD Hyundai Heavy Industries receives design approval for 20,000-cbm LNG bunkering vessel Bureau Veritas grants approval in principle following joint development project with South Korean shipbuilder.

		Peninsula outlines dual role in FuelEU Maritime compliance at Lloyd’s Register panel Marine fuel supplier discusses challenges for shipowners and opportunities for suppliers under new regulation.

		LNG-fuelled container ships dominate January alternative-fuel vessel orders Container ships accounted for 16 of 20 alternative-fuelled vessels ordered in January, DNV reports.

		GCMD and CIMAC sign partnership to advance alternative marine fuel readiness Two-year agreement aims to bridge operational experience with technical standards for decarbonisation solutions.

		Renewable methanol project pipeline reaches 58.2m tonnes by 2031, GENA reports Project Navigator Methanol tracks 275 projects, including e-methanol, biomethanol and low-carbon methanol facilities globally.

		Petrobras adjusts bunker pricing and minimum order volumes at Santos Brazilian supplier discontinues volume discount tier and lowers minimum order quantity from 1 March.

		Viking Line secures biogas supply for 2026 after tenfold increase in biofuel use Åland-based ferry operator aims to maintain 50% biogas blend throughout the year on two vessels.

		GNV takes delivery of second LNG-powered vessel Aurora from Chinese shipyard Vessel to enter service on Genoa–Palermo route in April, completing first fleet renewal phase.

		Maersk takes delivery of first methanol-capable vessel in 9,000-teu series Tangier Maersk is the first of six mid-size container ships with methanol-capable dual-fuel engines.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

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