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


		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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