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Tue 23 Jan 2018 09:40

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

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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