Oil and fuel oil hedging market update

Brent closed down $0.02 last night to $63.84 and WTI closed at $58.11, down $0.84. So, it looks like the rally on Brent has stalled somewhat prior to the OPEC meeting on Thursday. It's annoying really as I'm not quite sure what "surprise" the market expects. I'm pretty convinced it has already priced in an extension of the cuts out to end 2018, so anything less than this will be a disappointment and potentially catastrophic for flat price. It's a bit like when you're at home and you hear a low flying helicopter flying outside your house. You rush to the window, "Quick love, get the kids!". Everyone peeks out of the window at the sight of a very low flying helicopter and potential Hollywood-style action. Where in fact it turns out that some idiot has stolen a loaf of bread from the local 7-11 and the fun is over when he's nabbed by the local bobby on a bike. That's what the build up to the OPEC meeting is like. All the talk seems to have shifted to beyond OPEC and the future of crude oil production. Not in the next 2,3 or 5 years but further out than that - the medium term. And the only words on peoples lips are either gas or shale production. Let me put it to you this way: the top 7 most valuable companies by market capitalization are all tech companies. Tech is the way forward no matter how much you may try to ignore it with your Nokia 3310 and weekly trips to the library. Shale oil is the future and it is being driven by innovative technology. I sense that the market in general has yielded to this reality and with it, inevitably, comes people moving away from the more traditional ways of doing things. Now don't get me wrong, I like an Artisanal bakery, a trip to a farmers market and visiting my local butcher, but at the end of the day, in today's world it is a lot easier to just go to Tesco online and press "repeat last order". Buy, sell, OPEC, repeat.

Fuel Oil Market (November 27)

The front crack opened at -8.70, strengthened to -8.55, before weakening to -8.60. The Cal 18 was valued at -7.90.

Asian fuel oil refining margins on Monday snapped five straight sessions of losses after expectations of ample near-term supplies of the industrial fuel dampened sentiment

Asia's 180 cSt fuel oil crack to Brent crude cents narrowed its discount by 14 cents a barrel to -$5.12 a barrel. On Friday, the front-month crack sank to a seven-month low of -$5.26 a barrel.

Meanwhile, improved buying interest for spot physical cargoes of 380 cSt fuel oil helped lift cash premiums of the fuel away from a near two-week low it reached on Friday.

A total of 1.28 million tonnes of fuel oil have traded in the window in November so far, against 1.56 million tonnes in October.

Economic Data/Events: (UK times)

* 1:30pm: U.S. Advance Goods Trade Balance, Oct.

* 1:30pm: U.S. Wholesale Inventories, Oct. (prelim)

* 1:30pm: U.S. Retail Inventories (Oct.)

* 2pm: U.S. FHFA House Price Index (Sept.)

* 2:45pm: Senate Banking, Housing and Urban Affairs Cmte hearing on nomination of Jerome Powell to be Fed chair

* 3pm: U.S. Conf. Board Consumer Confidence (Nov.)

* 3pm: U.S. Richmond Fed. Manf Index (Nov.)

* 9:30pm: API issues weekly U.S. oil inventory report

Singapore 380 cSt

Dec17 - 362.00 / 364.00

Jan18 - 361.25 / 363.25

Feb18 - 360.00 / 362.00

Mar18 - 359.25 / 361.25

Apr18 - 358.00 / 360.00

May18 - 357.00 / 359.00

Q1-18 - 360.00 / 362.00

Q2-18 - 357.00 / 359.00

Q3-18 - 351.75 / 354.25

Q4-18 - 346.25 / 348.75

CAL18 - 355.75 / 358.75

CAL19 - 321.25 / 326.25

Singapore 180 cSt

Dec17 - 366.00 / 368.00

Jan18 - 365.50 / 367.50

Feb18 - 365.00 / 367.00

Mar18 -364.50 / 366.50

Apr18 - 363.75 / 365.75

May18 - 363.00 / 365.00

Q1-18 - 365.00 / 367.00

Q2-18 - 362.75 / 364.75

Q3-18 - 357.75 / 360.25

Q4-18 -352.50 / 355.00

CAL18 - 362.00 / 365.00

CAL19 - 330.00 / 335.00

Rotterdam 380 cSt

Dec17 343.75 / 345.75

Jan18 344.00 / 346.00

Feb18 344.00 / 346.00

Mar18 343.75 / 345.75

Apr18 343.00 / 345.00

May18 342.25 / 344.25< br>
Q1-18 343.75 / 345.75

Q2-18 3342.25 / 344.25

Q3-18 337.75 / 340.25

Q4-18 3329.25 / 331.75

CAL18 339.75 / 342.75

CAL19 301.25 / 306.25


		GTT unveils cubic LNG fuel tank design for boxships with BV approval New GTT CUBIQ design claims to reduce construction time and boost cargo capacity.

		Hapag-Lloyd secures multi-year liquefied biomethane supply deal with Shell Agreement supports container line's decarbonisation strategy and net-zero fleet operations target by 2045.

		Dual-fuel vessels will dominate next decade, says Columbia Group Ship manager predicts LNG-powered vessels will bridge gap until zero-carbon alternatives emerge.

		VPS campaign claims 12,000 tonnes of CO2 savings across 300 vessels Three-month efficiency drive involved 12 shipping companies testing operational strategies through software platform.

		Gard warns of widespread cat fines surge in marine fuel Insurer reports elevated contamination levels, echoing VPS circular in early September.

		ScanOcean opens London office to expand global bunker trading operations New office will be led by Christoffer Ahlqvist, Head of Trading.

		Aurora Expeditions claims 90% GHG reduction in landmark HVO trials Sylvia Earle said to be the first Infinity-class ship to trial HVO biofuel.

		Wärtsilä wins contract for electric propulsion systems on two Danish ferries Technology group to supply integrated electric systems for Molslinjen's battery-electric catamarans.

		Bunker Holding executive to address biofuels at Berlin event Manja Ostertag will discuss production scaling and supply chain integration at September forum.

		Denmark's first electric tug named as Svitzer advances decarbonisation goals Svitzer Ingrid said to reduce annual CO₂ emissions by 600-900 tonnes using battery power.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

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