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Tue 2 Jan 2018, 09:04 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed 2017 at $66.87, WTI closed at $60.42. Crude has started the New Year with the same fanciful wishing as an overweight bloke who has seen a personal trainer for the first time this morning. $70 for Brent is in touching distance and who knows where we go from there? $80? $100? It is incredible though - I made a point last week about whether the market will retrace after the Forties pipeline is back or when the Es Sider pipe in Libya is repaired. The market jumped significantly after news emerged of these two temporary production shutdowns, but now that Forties is back and Es Sider is due to come back online soon, has flat price weakened? Not a bit of it. We really do seem to be in a bull market and with the market not seemingly happy to readjust after production is back in these two areas, could that mean that we are in an overbought market? Caution on flat price over the coming week. What else is going on? Well, the US rig count closed 2017 up 42% from 2016. Quite a jump. Apparently US production is at 10mn bpd. Let's not forget that in May 2016 the US rig count was at 404; today we are 747. Will the US rig count ever return to the record set in 1981 of over 4,500 wells? Well, if flat price continues to rise, who knows?

Fuel Oil Market (December 29)

The front crack opened at -8.40, weakening to -8.55, before strengthening to -8.50. The Cal 18 was valued at -8.10.

Economic Data and Events

* Bloomberg OPEC output survey

* Russian oil ministry data on production, exports for December

* Bloomberg fcast of U.S. waterborne LPG exports

* Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday EIA report

* See OIL WEEKLY AGENDA for this week's events

Singapore 380 cSt

Feb18 - 376.50 / 378.50

Mar18 - 376.00 / 378.00

Apr18 - 375.75 / 377.75

May18 - 375.25 / 377.25

Jun18 - 374.25 / 376.25

Jul18 - 373.25 / 375.25

Q2-18 - 376.00 / 378.00

Q3-18 - 371.75 / 373.75

Q4-18 - 366.50 / 369.00

Q1-19 - 358.75 / 361.25

CAL9 - 356.50 / 359.50

Singapore 180 cSt

Feb18 - 378.25 / 380.25

Mar18 - 378.25 / 380.25

Apr18 - 378.00 / 380.00

May18 - 377.75 / 379.75

Jun18 - 377.00 / 379.00

Jul18 - 378.75 / 380.75

Q2-18 - 380.75 / 382.75

Q3-18 - 377.25 / 379.25

Q4-18 - 372.25 / 374.75

Q1-19 - 366.75 / 369.25

CAL19 - 365.00 / 368.00

Rotterdam Barges

Feb18 362.50 / 364.50

Mar18 362.25 / 364.25

Apr18 362.00 / 364.00

May18 361.25 / 363.25

Jun18 360.00 / 362.00

Jul18 358.50 / 360.50

Q2-18 362.25 / 364.25

Q3-18 357.50 / 359.50

Q4-18 348.25 / 350.75

Q1-19 340.50 / 343.00

CAL19 336.00 / 339.00

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.
Artistic impression of battery-electric ferry for operation on Perth’s Swan River. Lloyd’s Register to class Western Australia’s first electric ferry fleet  

Echo Marine Group partners with Lloyd’s Register on five battery-electric ferries for Perth’s Swan River.
Thomas Kazakos, secretary general of The International Chamber of Shipping (ICS). ICS condemns Middle East shipping attacks as 20,000 seafarers remain trapped  

Industry body calls for urgent state action to resupply vessels and enable crew changes.
Molslinjen ferry illustration. Molslinjen order propels Australia to top of battery vessel production rankings  

Danish ferry operator’s three-catamaran order at Incat Tasmania shifts global manufacturing landscape, analysis shows.
Petrobras logo. Petrobras doubles invoiced price of MGO and LSMGO  

Export tax by Brazil's federal government forces Petrobras to double distillate invoice values.
Bunkering of Viking Line's Viking Glory by a Gasum vessel in Turku, Finland. Gasum renews FuelEU Maritime pooling partnerships with Viking Line and Wallenius SOL  

Nordic energy company extends compliance pooling arrangements with two shipping companies operating bio-LNG vessels.
Naming ceremony for CMA CGM Carmen on 18 March 2026. CMA CGM names methanol-powered container ship CMA CGM Carmen  

French shipping line christens 15,000-teu vessel as part of its alternative fuel fleet expansion.




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