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Thu 18 Jan 2018 09:02

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

Lease agreement between Inter Terminals Sweden and the Port of Gothenburg, signed on July 1st. Pictured: Göran Eriksson, CEO of the Port of Gothenburg (left) and Johan Zettergren, Managing Director of Inter Terminals Sweden (right). New Gothenburg lease an opportunity to expand green portfolio: Inter Terminals  

Bunker terminal operator eyes tank conversion and construction projects for renewable products.
Map of US Gulf. Peninsula extends US Gulf operation offshore  

Supplier to focus on Galveston Offshore Lightering Area (GOLA) in strategy to serve growing client base.
The M/T Jutlandia Swan, operated by Uni-Tankers. Uni-Tankers vessel gets wind-assisted propulsion  

Fourth tanker sails with VentoFoil units as manufacturer says suction wing technology is gaining traction.
Port of Gothenburg Energy Port. Swedish biomethane bunkered in Gothenburg  

Test delivery performed by St1 and St1 Biokraft, who aim to become large-scale suppliers.
Image from Cockett Marine Oil presentation. Cockett to be closed down after 45 years  

End of an era as shareholders make decision based on 'non-core nature' of Cockett's business.
Petrobras logo. Petrobras confirms prompt availability of VLS B24 at Rio Grande  

Lead time for barge deliveries currently five days.
Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.
Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.
Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.
Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

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