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Thu 9 Nov 2017, 09:02 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed down $0.20 last night to $63.49 and WTI closed at $56.81, down $0.39. Honestly what is the point of API numbers? Why does the market react off numbers that are wrong at least 60 pct of the time compared to actual data published by EIA? Crude showed a build last week in the US - which shouldn't surprise anyone; they are producing so much that it has to go somewhere. I think this may be the shape of things to come for a while as well.

Fuel Oil Market (November 8)

The front crack opened at -8.05, weakening to -8.50, before strengthening to -8.05. The Cal 18 was valued at -7.60.

The EW arbitrage spread of 380 cSt fuel oil narrowed amid no shortage of fuel oil inflows into Singapore as well as weaker fuel oil prices in the city-state relative to Rotterdam prices.

Despite the narrower spread, sources said arbitrage opportunities between northwest Europe and Singapore remain 'workable', but is unlikely to attract many large fixtures amid ample near-term inventories and as the year draws to an end.

Fujairah inventories fell 743,000 barrels (or about 111,000 tonnes) to 8.641 million barrels (1.29 million tonnes) in the week to Nov. 6.

CMA CGM said it would use liquefied natural gas to power nine extra-large vessels it has ordered, in a first for an industry grappling with 2020 regulations.

Economic Data/Events: (UK times)

* 1:30pm: U.S. Initial Jobless Claims, Nov. 4, est. 232k (prior 229k)

* 1:30pm: U.S. Continuing Claims, Oct. 28, est. 1,885k (prior 1,884k)

* 2:45pm: Bloomberg Consumer Comfort, Nov. 5 (prior 51.7)

* 3pm: U.S. Wholesale Inventories m/m, Sept. F, est. 0.3% (prior 0.3%)

* 8:45pm: Bloomberg oil trading panel, with Peter Sherk, CEO Americas at Mercuria Energy Trading

* Russian refining maintenance schedule from ministry

Singapore 380 cSt

Dec17 - 369.50 / 371.50

Jan18 - 368.00 / 370.00

Feb18 - 366.50 / 368.50

Mar18 - 365.00 / 367.00

Apr18 - 363.50 / 365.50

May18 - 362.00 / 364.00

Q1-18 - 366.50 / 368.50

Q2-18 - 362.00 / 364.00

Q3-18 - 356.75 / 359.25

Q4-18 - 351.25 / 353.75

CAL18 - 359.00 / 362.00

CAL19 - 318.75 / 323.75

Singapore 180 cSt

Dec17 - 374.00 / 376.00

Jan18 - 373.00 / 375.00

Feb18 - 372.00 / 374.00

Mar18 - 371.00 / 373.00

Apr18 - 369.75 / 371.75

May18 - 368.75 / 370.75

Q1-18 - 372.00 / 374.00

Q2-18 - 368.00 / 370.00

Q3-18 - 363.50 / 366.00

Q4-18 - 358.00 / 360.50

CAL18 - 365.25 / 368.25

CAL19 - 327.50 / 332.50

Rotterdam 380 cSt

Dec17 350.25 / 352.25

Jan18 349.25 / 351.25

Feb18 348.25 / 350.25

Mar18 347.50 / 349.50

Apr18 346.50 / 348.50

May18 345.50 / 347.50

Q1-18 348.25 / 350.25

Q2-18 345.75 / 347.75

Q3-18 340.75 / 343.25

Q4-18 331.75 / 334.25

CAL18 341.25 / 344.25

CAL19 297.25 / 302.25

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Bureau Veritas grants approval in principle following joint development project with South Korean shipbuilder.
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Two-year agreement aims to bridge operational experience with technical standards for decarbonisation solutions.




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