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  

Flex Commodities office in Dubai. Flex Commodities moves Dubai head office to Jumeirah Lakes Towers  

UAE-based firm relocates to waterfront community popular amongst bunker companies.

Echandia Core marine battery system. Echandia: Batteries offer fuel savings by optimising generator loads on large vessels  

Marine batteries could cut auxiliary generator fuel consumption by up to 15%, according to technology firm.

Palermo LNG facility. Amazónica LNG joins SEA-LNG, extending the coalition’s reach into Latin America  

Colombian LNG terminal operator becomes first South American member of the multi-sector industry group.

Launching ceremony of Priority. Hong Lam Marine launches first of four newbuild bunkering vessels  

First ship in the series, Priority, is launched in Jiangmen, China.

CMA CGM Osmium ship-to-ship (STS) bunkering operation. CMA CGM completes world’s largest single-batch biomethanol bunkering at Shanghai  

8,016-tonne operation said to be enough to fuel an entire transoceanic voyage.

ClassNK logo. ClassNK revises alternative fuels guidelines to address hydrogen, methanol and ethanol safety requirements  

Updated guidelines incorporate IMO hydrogen rules and new structural standards for alcohol fuel tanks.

CMA CGM containership. MacGregor wins cargo handling contract for six LNG-powered boxships at Cochin Shipyard  

CMA CGM container vessels are scheduled for delivery between 2029 and 2031.

KRATT vessel. Estonia launches biomethane-battery workboat for state fleet  

38-metre KRATT is said to be the first vessel of its kind in the region.

YM Willpower bunkering operation via SIMOPS. Yang Ming completes first LNG SIMOPS bunkering for YM Willpower in Shanghai  

Dual-fuel boxship receives 2,000 tonnes of LNG during simultaneous cargo operations.

Chris Kruger, AYK Energy. AYK Energy and Gebhard Electro secure two vessel electrification contracts  

A new dredger and a patrol vessel retrofit form the latest battery projects for the duo.