Thu 25 Jan 2018, 09:33 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude futures, hit a session high of $71.05 per barrel - the highest since early December 2014 - early this morning. U.S. WTI crude futures climbed to $66.35 per barrel, also the highest level since early December 2014. I hope those that read yesterday's report chose the right factor to focus on - the technical trading. The EIA draw on crude also gave the necessary excuse for prices to shoot up above the $71 barrier; a surprise, but should the EIA disagreeing with the API really be such a surprise these days? There's also the creeping weakness of the dollar. Lots of little factors adding together. It's like when you have been offered something you know you shouldn't have and someone keeps adding one after another little reasons to undermine the inner thought not to do it. Should I have another pint? No. Your friend to you: "But it's the weekend tomorrow" and "we've not been out for a while" and "it will help you sleep". Now the short positions in the market will come more into focus in analysis of the market. Let's see what the technicals say today. There could be a few more surprises to come. Remember what we were all saying last year? Could be down to $40, $30 again. And here we sit closer to $100.

Fuel Oil Market (January 24)

The front crack opened at -11.70, strengthening to -11.65, before weakening to -11.80. The Cal 19 was valued at -15.00.

Asia's February visco spread climbed to a near five-month high on Tuesday as some industry participants expected an apparent shortage in supplies of cutter stocks in the near term, sources said.

A surge in buying interest for physical cargoes lifted cash premiums for Asia's 380 cSt high-sulphur fuel oil to near four-month high on Wednesday, trade source said.

Strong buying interest was also present in the paper market, lifting the backwardation structure of the frontmonth 380 cSt time spread to its widest premium since late December, Reuters data showed. This came as fuel oil inventories in the Fujairah oil hub sank to a record low, as poor regional demand pushed higher volumes of the fuel towards Asia, trade sources said.

Economic Data and Events

* 1:30pm: U.S. Initial Jobless Claims for Jan. 20, est. 235k, prior 220k

* 1:30pm: U.S. Continuing Claims Jan. 13, est. 1925k, prior 1952k

* 2:45pm: Bloomberg Consumer Comfort Jan. 21, prior 53.8

* 3pm: U.S. New Home Sales Dec., est. 675k, prior 733k

* Today:

** Russian refining maintenance schedule from ministry

** Myanmar Oil, Gas and Power Summit in Yangon, 1st day of 2

** World Economic Forum in Davos, 3rd day of 4

Singapore 380 cSt

Feb18 - 384.50 / 386.50

Mar18 - 384.25 / 386.25

Apr18 - 384.00 / 386.00

May18 - 383.50 / 385.50

Jun18 - 382.75 / 384.75

Jul18 - 381.50 / 383.50

Q2-18 - 383.50 / 385.50

Q3-18 - 380.00 / 382.00

Q4-18 - 373.75 / 376.25

Q1-19 - 365.25 / 367.75

CAL19 - 327.75 / 330.75

CAL20 - 271.50 / 276.50

Singapore 180 cSt

Feb18 - 390.00 / 392.00

Mar18 - 389.75 / 391.75

Apr18 - 390.00 / 392.00

May18 - 389.50 / 391.50

Jun18 - 388.75 / 390.75

Jul18 - 387.50 / 389.50

Q2-18 - 389.50 / 391.50

Q3-18 - 386.00 / 388.00

Q4-18 - 379.75 / 382.25

Q1-19 - 371.25 / 373.75

CAL19 - 335.75 / 338.75

CAL20 - 280.75 / 285.75

Rotterdam Barges

Feb18 370.75 / 372.75

Mar18 372.00 / 374.00

Apr18 372.00 / 374.00

May18 371.25 / 373.25

Jun18 370.25 / 372.25

Jul18 368.75 / 370.75

Q2-18 371.00 / 373.00

Q3-18 366.50 / 368.50

Q4-18 357.00 / 359.50

Q1-19 349.00 / 351.50

CAL19 307.25 / 310.25

CAL20 250.25 / 255.25


MAmmoSS graphic. Mitsubishi Shipbuilding receives order for ammonia fuel handling system  

MAmmoSS system will support shop testing of ammonia marine engines from two licensors.

Neoliner Origin vessel. Kongsberg Maritime to lead EU Horizon project targeting wind-assisted propulsion at scale  

A 15-partner European consortium will use two full-scale vessel demonstrators to validate wind propulsion technology.

Petrobras logo. Petrobras warns of extended MGO and VLSFO supply suspension at Port of Itaqui  

Fuel distributor announces pipeline maintenance shutdowns affecting both MGO and VLSFO supply.

Richard Berkling, PowerCell Group. PowerCell secures SEK 50m marine fuel cell order for two liquid hydrogen cargo ships  

Swedish fuel cell maker wins contract to power two North Sea hydrogen vessels by 2028.

Wärtsilä hydrogen engine. MatH2 consortium launched to tackle hydrogen materials barriers  

New Finnish-led alliance targets materials compatibility challenges holding back hydrogen adoption.

CMA CGM Berenice vessel. CMA CGM takes delivery of fifth methanol dual-fuel boxship in series from Jiangnan Shipyard  

15,000-teu vessel is the penultimate ship in a six-vessel series due for completion in September.

VeriSphere logo. VPS launches VeriSphere Webshop in push to digitise marine fuel services  

Veritas Petroleum Services unveils self-service digital platform giving customers direct access to fuel data tools.

Titus vessel. ExxonMobil and Wallenius Wilhelmsen complete first trial of biofuel blend made from FAME distillation residue  

Vehicle carrier bunkered in Zeebrugge with B30 VLSFO blend.

Chimbusco and Shenergy green methanol agreement signing. 'China’s largest single-order green methanol procurement deal' announced  

Chimbusco and Shenergy seal agreement for 6,000 tonnes of methanol.

Moriond vessel. Exmar takes delivery of third dual-fuel LPG midsize gas carrier in newbuild programme  

Belgian shipping group Exmar takes delivery of the 41,000-cbm LPG carrier Moriond.