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Thu 9 Nov 2017 09:02

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

Lease agreement between Inter Terminals Sweden and the Port of Gothenburg, signed on July 1st. Pictured: Göran Eriksson, CEO of the Port of Gothenburg (left) and Johan Zettergren, Managing Director of Inter Terminals Sweden (right). New Gothenburg lease an opportunity to expand green portfolio: Inter Terminals  

Bunker terminal operator eyes tank conversion and construction projects for renewable products.
Map of US Gulf. Peninsula extends US Gulf operation offshore  

Supplier to focus on Galveston Offshore Lightering Area (GOLA) in strategy to serve growing client base.
The M/T Jutlandia Swan, operated by Uni-Tankers. Uni-Tankers vessel gets wind-assisted propulsion  

Fourth tanker sails with VentoFoil units as manufacturer says suction wing technology is gaining traction.
Port of Gothenburg Energy Port. Swedish biomethane bunkered in Gothenburg  

Test delivery performed by St1 and St1 Biokraft, who aim to become large-scale suppliers.
Image from Cockett Marine Oil presentation. Cockett to be closed down after 45 years  

End of an era as shareholders make decision based on 'non-core nature' of Cockett's business.
Petrobras logo. Petrobras confirms prompt availability of VLS B24 at Rio Grande  

Lead time for barge deliveries currently five days.
Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.
Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.
Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.
Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

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