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Thu 18 Jan 2018, 09:02 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed last night at $69.38, WTI closed at $63.97. So here we are, $70 per bbl. Did anyone take any notice, though, when I said that US oil stocks are actually increasing? The crude that's being drawn isn't going anywhere, it's just been turned into oil products. This week, apparently we should see another draw on crude stocks in the US, and guess what? You got it - a build in product inventories.

Fuel Oil Market (January 17)

The front crack opened at -11.70, strengthening to -11.50 across the day. The Cal 19 was valued at -12.60.

The discount in Asia's front-month 380 cSt fuel oil time spread was trading at its widest since early-August on Wednesday as concerns of limited spot demand and ample prompt supplies of the fuel continued to weigh on market sentiment.

The Singapore 380 cSt Feb-March time spread was trading at a discount of 70 cents a tonne around 5pm Singapore time on Wednesday in the Intercontinental Exchange, down from its -50 cents a tonne settlement in the previous session. Total fuel oil flows into East Asia for January are expected to close lower than December's 10- month high of about 6.7 million tonnes.

Fujairah fuel oil inventories dropped 6 percent, or 545,000 barrels (about 81,000 tonnes), to a three-week low of 8.529 million barrels (1.273 million tonnes) in the week ended Jan. 15.

Economic Data and Events

Singapore 380 cSt

Feb18 - 375.75 / 377.75

Mar18 - 376.25 / 378.25

Apr18 - 376.75 / 378.75

May18 - 376.75 / 378.75

Jun18 - 376.25 / 378.25

Jul18 - 375.75 / 377.75

Q2-18 - 376.75 / 378.75

Q3-18 - 374.75 / 376.75

Q4-18 - 370.75 / 373.25

Q1-19 - 364.00 / 366.50

CAL19 - 340.75 / 343.75

CAL20 - 289.25 / 294.25

Singapore 180 cSt

Feb18 - 380.25 / 382.25

Mar18 - 381.25 / 383.25

Apr18 - 381.75 / 383.75

May18 - 382.00 / 384.00

Jun18 - 381.50 / 383.50

Jul18 - 381.25 / 383.25

Q2-18 - 381.75 / 383.75

Q3-18 - 380.25 / 382.25

Q4-18 - 376.75 / 379.25

Q1-19 - 371.75 / 374.25

CAL19 - 349.25 / 352.25

CAL20 - 298.25 / 303.25

Rotterdam Barges

Feb18 363.00 / 365.00

Mar18 364.25 / 366.25

Apr18 364.75 / 366.75

May18 364.50 / 366.50

Jun18 364.00 / 366.00

Jul18 362.75 / 364.75

Q2-18 364.25 / 366.25

Q3-18 361.25 / 363.25

Q4-18 353.25 / 355.75

Q1-19 345.25 / 347.75

CAL19 320.25 / 323.25

CAL20 270.00 / 275.00

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.
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.




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