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  

Port Authority of Valencia board meeting. Valenciaport gives LNG bunkering go-ahead to Shell and Axpo Iberia  

Port authority approves two LNG bunkering authorisations as part of its decarbonisation strategy.

Northern Purpose naming ceremony. BSM enters LCO₂ carrier segment with management of dual-fuel Northern Purpose  

Bernhard Schulte Shipmanagement takes over first liquefied carbon dioxide carrier for Northern Lights project.

Anna Cosulich vessel. Fratelli Cosulich takes delivery of methanol-ready bunker tanker Anna Cosulich  

Vessel built in China will head to Singapore to support group's bunkering operations.

Nave Equator vessel. Navios Partners takes delivery of dual-fuel-ready Aframax tanker  

Nave Equator is equipped with LNG- and methanol-ready capability plus shore power connectivity.

EmissionLink logo. EmissionLink completes FuelEU pooling submissions for over 600 vessels  

Emissions management service says 90% of shipowners opted to pool in the first compliance cycle.

Dong Fang Qing Gang vessel. China's first inland hydrogen fuel cell container ship enters commercial service  

Dong Fang Qing Gang operates in Jiaxing with 64-teu capacity and zero emissions.

Damen ASD Tug 2713 Fuel Flexible (FF) vessel graphic. Damen receives methanol approval for ASD Tug 2713 fuel-flexible design  

Bureau Veritas and Dutch flag state grant approval, enabling construction of methanol-ready tugs.

Sing Fuels hiring graphic. Sing Fuels seeks supply trader for China-focused marine fuel procurement role  

Singapore-based firm recruiting for position involving supplier negotiations and market tracking across Asia.

Steel cutting ceremony of vessel with builder's hull no. CHB2061. Zhoushan Changhong begins construction on third 11,400-teu LNG dual-fuel container ship  

CHB2061 is the third vessel in an 18-ship series for Oceanroutes, designed to exceed EEDI Phase III standards.

Steel cutting ceremony of vessel with builder's hull no. CHB2050. Construction begins on fourth 19,000-teu LNG dual-fuel container ship for MSC  

Vessel is said to be the largest LNG dual-fuel container ship under construction in Zhejiang Province.