Oil and fuel oil hedging market update

Brent closed up $0.35 last night to $60.94 and WTI closed at $54.38, up $0.23. Who would have thought we'd be up to these dizzying heights? There just seems to be something uneasy about it all though; it doesn't feel comfortable. As quick as this market is to rally, it is also extremely capable of collapsing, and it doesn't take much to really cause a collapse. If the funds have bought in to this rally, then what's to stop them cashing out and selling their long positions? As Paul Daniels would say, "not a lot". However, I think it will be a while yet before we see any kind of price correction. EIA data is out later and, according to API, we can expect to see some pretty chunky drawdowns on crude and products.

Fuel Oil Market (October 31)

The front crack opened at -7.80, strengthening to -7.30 across the day. The Cal 18 was valued at -8.10.

Aggressive offers continued to weigh on the break-bulk ex-wharf premiums of Asia's 380-cst fuel, with some suppliers seeking to stimulate demand.

Demand for spot 380-cst ex-wharf fuel oil has been sluggish in recent weeks amid rising outright prices of 380-cst bunker fuel which has climbed to its highest level since June 2015, keeping some buyers at bay, sources said.

China said it would stop domestic sales of diesel with sulphur content higher than 10 parts ppm, typically used by tractors and ships, from Nov. 1, in its latest effort to clean up the nation's air.

The challenge will be in the execution of the ban, which follows a move earlier this year to stop sales of diesel with more than 50 ppm of sulphur and a 10-ppm cap on diesel used by cars.

Economic Data/Events: (UK times)

* 11am: U.S. MBA mortgage applications for week ended Oct. 27 (prior -4.6%)

* 12:15pm: U.S. ADP employment change for Oct., est. 200k (prior 135k)

* 1:45pm: U.S. Markit manufacturing PMI for Oct., final, est. 54.5 (prior 54.5)

* 2:30pm: U.S. EIA oil inventory report; TOPLive blog coverage begins 2:25pm

* 6pm: U.S. FOMC rate decision, est. 1.25% (prior 1.25%)

** Genscape weekly ARA crude stockpiles report

** International Energy Forum hosts 7th Asian Ministerial Energy Roundtable, Bangkok, Nov. 1-3. Speakers include Saudi Arabia's Energy Minister Khalid Al-Falih, U.A.E. Energy Minister Suhail Al Mazrouei

** International Emissions Trading Association event in London, ahead of the COP23 climate talks that will take place in Bonn starting Nov. 6

** Bloomberg will publish October monthly tanker-tracking assessments for several oil exporting nations, starting Wednesday

** Bloomberg will publish OPEC production survey for October on this day, or Thursday. Data may be the last entire-month set available before OPEC's next ministerial conference on Nov. 30

** International Petroleum Tax Conference, Oslo. Speakers include Norway Ministry of Finance's Tax-Law Director Stig Sollund

** Earnings: Occidental Petroleum

Singapore 380 cSt

Dec17 - 359.25 / 361.25

Jan18 - 357.00 / 359.00

Feb18 - 355.25 / 357.25

Mar18 - 353.25 / 355.25

Apr18 - 351.00 / 353.00

May18 - 349.75 / 351.75

Q1-18 - 353.00 / 355.00

Q2-18 - 348.50 / 350.50

Q3-18 - 343.25 / 345.75

Q4-18 - 338.25 / 340.75

CAL18 - 344.75 / 347.75

CAL19 - 328.25 / 333.25

CAL20 - 301.75 / 308.75

Singapore 180 cSt

Dec17 - 364.25 / 366.25

Jan18 - 353.50 / 355.50

Feb18 -360.75 / 362.75

Mar18 - 359.25 / 361.25

Apr18 - 357.50 / 359.50

May18 - 356.50 / 358.50

Q1-18 - 359.00 / 361.00

Q2-18 - 355.00 / 357.00

Q3-18 - 349.75 / 352.25

Q4-18 - 345.75 / 348.25

CAL18 - 351.50 / 354.50

CAL19 - 337.25 / 342.25

CAL20 - 311.25 / 318.25

Rotterdam 380 cSt

Dec17 338.75 / 340.75

Jan18 337.00 / 339.00

Feb18 336.00 / 338.00

Mar18 335.25 / 337.25

Apr18 334.50 / 336.50

May18 333.50 / 335.50

Q1-18 335.25 / 337.25

Q2-18 333.00 / 335.00

Q3-18 328.75 / 331.25

Q4-18 321.25 / 323.75

CAL18 328.00 / 331.00

CAL19 289.00 / 294.00

CAL20 246.00 / 253.00


		Dorian LPG takes delivery of dual-fuel VLGC capable of carrying ammonia The 93,000-cbm Areion can run on LPG or fuel oil and transport ammonia cargoes.

		RINA awards ISCC EU certification to OLT Offshore LNG Toscana for bio-LNG supply Certification enables bio-LNG use in the EU as a renewable fuel under RED II and RED III directives.

		WSC calls for safe maritime corridor as 20,000 seafarers remain trapped in the Persian Gulf Industry body urges IMO member states to establish safe passage and supply access.

		Auramarine to host webinar on ammonia as marine fuel in April Finnish firm will explore ammonia’s role in maritime decarbonisation at its third spring webinar.

		Green ammonia could reach cost parity with VLSFO and LNG by 2050, study finds WinGD and Envision Energy study projects green ammonia operational costs competitive with conventional marine fuels.

		Bureau Veritas verifies methane emissions on Brittany Ferries’ LNG vessels Verification enables ferry operator to report measured methane slip instead of regulatory default values.

		Alliance calls for urgent black carbon action as new Arctic emission control areas take effect Canadian Arctic and Norwegian Sea ECAs now in force, with compliance deadline set for March 2027.

		Lloyd’s Register to class Western Australia’s first electric ferry fleet Echo Marine Group partners with Lloyd’s Register on five battery-electric ferries for Perth’s Swan River.

		ICS condemns Middle East shipping attacks as 20,000 seafarers remain trapped Industry body calls for urgent state action to resupply vessels and enable crew changes.

		Molslinjen order propels Australia to top of battery vessel production rankings Danish ferry operator’s three-catamaran order at Incat Tasmania shifts global manufacturing landscape, analysis shows.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

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