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Tue 23 Jan 2018, 09:40 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent crude futures were at $69.38 a barrel at 0756 GMT, up $35 cents, or 0.5 percent, from their last close, not far off the three-year high of $70.37 reached on Jan. 15. U.S. WTI crude futures were at $63.93 a barrel, up $36 cents, or 0.6 percent, from their last settlement. Everything is looking rosey this morning, IMF forecasts for the world economy are up, everyone has suddenly remembered that it is winter in the northern hemisphere and said to themselves "oh yeah, probably higher oil consumption, that's great". Meanwhile, the U.S. dollar has lost a lot of ground to sterling of late, and with a weaker dollar comes higher oil. There's going to be a delay in some of the effects of changing market conditions. Look, for example, at the crack and the effect of the increasing share of U.S. lighter crude. The crack has come off as brent has rocketed, but it's strength could easily hold up fuel prices if the trend continues. What about the diminishing profits of refiners with higher crude? Will this diminish demand for crude in large refining areas like China? With these diminishing returns, will refineries be so keen to change to new products for the 2020 fuel change? Less so, I would say. There's always two sides of the same coin, and this coin has been landing on one side for a while now; it could be time for a change.

Fuel Oil Market (January 22)

Economic Data and Events

* 3pm: Richmond Fed Manufacturing Index, Jan., est. 19, prior 20

* 9:30pm: API issues weekly U.S. oil inventory report

* World Economic Forum in Davos starts, 1st day of 4

Singapore 380 cSt

Feb18 - 377.00 / 379.00

Mar18 - 376.75 / 378.75

Apr18 - 376.75 / 378.75

May18 - 376.25 / 378.25

Jun18 - 375.75 / 377.75

Jul18 - 374.75 / 376.75

Q2-18 - 376.25 / 378.25

Q3-18 - 373.00 / 375.00

Q4-18 - 367.25 / 369.75

Q1-19 - 359.75 / 362.25

CAL19 - 328.50 / 331.50

CAL20 - 272.25 / 277.25

Singapore 180 cSt

Feb18 - 382.50 / 384.50

Mar18 - 382.50 / 384.50

Apr18 - 382.25 / 384.25

May18 - 381.75 / 383.75

Jun18 - 381.25 / 383.25

Jul18 - 380.25 / 382.25

Q2-18 - 381.75 / 383.75

Q3-18 - 378.50 / 380.50

Q4-18 - 373.00 / 375.50

Q1-19 - 366.25 / 368.75

CAL19 - 336.50 / 339.50

CAL20 - 281.50 / 286.50

Rotterdam Barges

Feb18 364.50 / 366.50

Mar18 365.00 / 367.00

Apr18 364.75 / 366.75

May18 364.00 / 366.00

Jun18 363.00 / 365.00

Jul18 361.50 / 363.50

Q2-18 364.00 / 366.00

Q3-18 359.50 / 361.50

Q4-18 349.75 / 352.25

Q1-19 341.75 / 344.25

CAL19 308.00 / 311.00

CAL20 251.50 / 256.50

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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