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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

Tallink’s MyStar vessel. Tallink targets full bio-LNG transition for Baltic shuttle vessels within a year  

Estonian ferry operator aims to replace all fossil LNG with renewable fuel on the Helsinki-Tallinn route.
Grimaldi's Grande Melbourne vessel. Grimaldi takes delivery of third ammonia-ready car carrier from Chinese shipyard  

Grande Melbourne is the third of seven vessels ordered from Shanghai Waigaoqiao Shipbuilding for Asia-Europe service.
BPCL and Cochin Port sign MoU. BPCL and Cochin Port sign MoU for LNG bunkering facilities  

Indian oil company and port authority agree to develop LNG refuelling infrastructure for vessels.
ClassNK Guidelines front cover. ClassNK publishes world-first guidelines for membrane-based onboard CO2 capture systems  

Classification society expands guidelines to cover membrane separation method for capturing ship exhaust emissions.
April Tan, Flex Commodities. Flex Commodities hires April Tan as lead trader for China  

Dubai-based marine fuels trader appoints experienced professional to Singapore office to drive regional expansion.
Contract signing ceremony. Yang Ming finalizes contracts for six methanol dual-fuel-ready boxships  

Taiwanese carrier signs deals with Japanese shipbuilders for vessels scheduled for delivery from 2028.
China’s Da Qing 268 vessel. China's first newbuild dual-fuel methanol bunkering vessel launched in Zhoushan  

Da Qing 268 can supply methanol and conventional fuels to ships at anchorage.
Graphic announcing Standard Fuel Oils FT recognition. Standard Fuel Oils recognized in Financial Times Europe's Long-Term Growth Champions  

Liverpool-based fuel supplier included in ranking of 300 European companies with sustained revenue growth.
Naming ceremony of Wilhelmshaven Express. Hapag-Lloyd completes newbuild programme with delivery of dual-fuel vessel  

German carrier christens Wilhelmshaven Express, marking completion of 12-vessel Hamburg Express class series.
Adani Ports and BPCL sign MoU. MoU signed to develop LNG bunkering facility at Vizhinjam  

Partnership aims to establish LNG refuelling hub for international vessels at Kerala.




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