Thu 30 Nov 2017, 08:50 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Brent closed down $0.50 last night to $63.11 and WTI closed down $0.69 to $57.30. The 30th of November. 26 days until Christmas. 32 days until we see the start of a New Year. But we all know why everyone is so excited today, don't we? That's right, tomorrow marks the start of Christmas cracker joke season! I'm so excited I don't know what to do with myself. Oh and apparently there is a meeting going on in Vienna concerning oil. I wonder though, what will OPEC bring? Christmas cheer or Christmas fear? Well I think probably a bit of both. We all know OPEC loves leaving an ace card up their sleeve; they will never give everything away, so even if the news isn't particularly what everyone is hoping for, then there will still be that level of ambiguity leaving people guessing and scratching their heads. The only people who will be truly thankful - huddled around a TV in a bar - will be the US producers. I can see them later, red-faced from too much bourbon, slapping each other on the back. Then the moment comes when OPEC are going to announce and CABOOM! It's like that bit at the end of the film The Truman Show. You're just willing him to open that door; and when he does, everyone goes nuts. But what's through the door? Look, it doesn't really matter; whatever the announcement later, it is only going to be positive for the price of oil and the real winners will be the US producers. They're already at 9.8mn bpd of production and it's going to 10 before the end of the year. An extension of the cuts means flat price stays higher, profits grow, further investment in technology - resulting in lower production cuts. I think the US producers will be ordering two turkeys this year - unless, of course, OPEC don't extend the cuts as long as people think. Then what will happen? Hold your hats. Good day.

Fuel Oil Market (November 29)

The front crack opened at -9.10, strengthening to -8.80, before weakening to -8.85, ending -8.80. The Cal 18 was valued at -8.15.

A lack of buying interest for physical cargoes of high-sulphur fuel oil weighed on cash differentials of Asia's 180 cSt and 380 cSt fuel oil grades.

Some industry participants said buyers of fuel oil cargoes might be holding back in anticipation of falling prices following the OPEC/non-OPEC meeting on Nov. 30.

Oil prices fell on Wednesday on doubts OPEC and Russia will agree on extending a crude production cut to cover all of 2018, and after a report of an unexpected rise in U.S. crude oil inventories.

Fujairah fuel oil inventories rose 13%, or 1.267 million barrels (about 189,000 tonnes), from a week ago to a nine-week high of 10.908 million barrels (1.63 million tonnes) in the week ended Nov. 27.

Economic Data/Events: (UK times)

* 8am: Singapore onshore oil-product stockpile data

* 8:30am: Top Live OPEC Blog

* 1:30pm: U.S. Initial Jobless Claims, Nov. 25

* 1:30pm: U.S. Continuing Claims, Nov. 18

* 1:30pm: U.S. Personal Income, Oct.

* 2:45pm: Bloomberg Consumer Comfort, Nov. 26

* 2:45pm: Chicago Purchasing Manager, Nov.

Singapore 380 cSt

Dec17 - 360.25 / 362.25

Jan18 - 359.00 / 361.00

Feb18 - 358.25 / 360.25

Mar18 - 357.75 / 359.75

Apr18 - 356.75 / 358.75

May18 - 355.50 / 357.50

Q1-18 - 358.25 / 360.25

Q2-18 - 356.25 / 358.25

Q3-18 - 351.25 / 353.75

Q4-18 - 346.00 / 348.50

CAL18 - 351.75 / 354.75

CAL19 - 317.25 / 322.25

Singapore 180 cSt

Dec17 - 364.25 / 366.25

Jan18 - 363.25 / 365.25

Feb18 - 363.00 / 365.00

Mar18 - 362.75 / 364.75

Apr18 - 362.25 / 364.25

May18 - 361.25 / 363.25

Q1-18 - 363.00 / 365.00

Q2-18 - 361.75 / 363.75

Q3-18 - 357.25 / 359.75

Q4-18 - 352.25 / 354.75

CAL18 - 358.00 / 361.00

CAL19 - 326.00 / 331.00

Rotterdam 380 cSt

Dec17 342.25 / 344.25

Jan18 342.50 / 344.50

Feb18 342.25 / 344.25

Mar18 342.00 / 344.00

Apr18 341.25 / 343.25

May18 340.25 / 342.25

Q1-18 342.25 / 344.25

Q2-18 340.75 / 342.75

Q3-18 336.00 / 338.50

Q4-18 327.75 / 330.25

CAL18 335.75 / 338.75

CAL19 296.75 / 301.75

BP  

WinGD methanol and ethanol webinar invitation. WinGD to host webinar on methanol- and ethanol-flexible fuel engine technology  

Engine manufacturer will discuss market outlook, regulations and operational experience with alcohol-based marine fuels.

Peninsula graduate programme group photo. Peninsula opens applications for 2026 graduate programmes in marine fuels trading  

Two-year scheme offers positions across six global locations starting in September, combining hands-on experience with structured development.

Collin She, Oilmar DMCC. Oilmar DMCC promotes Collin She to key account manager role  

She will lead strategic customer relationships and drive growth opportunities in Singapore and the wider region.

Areion vessel. 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.

FSRU Toscana alongside Green Zeebrugge vessel. 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.

World Shipping Council at IMO meeting. 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.

Graphic promoting Auramarine webinar titled 'Sustainable Fueling Part 3: Ammonia - next alternative fuel in marine'. 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.

Front cover of study by WinGD and Envision Energy titled 'Renewable Fuel Economics: An OPEX illustration based on current costs'. 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.

Elenger Marine's LNG bunkering vessel Optimus alongside Brittany Ferries’ Saint-Malo. Bureau Veritas verifies methane emissions on Brittany Ferries’ LNG vessels  

Verification enables ferry operator to report measured methane slip instead of regulatory default values.

Map showing existing and planned Emission Control Areas (ECAs). 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.