Thu 25 Jan 2018 09:33

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


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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