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


Tangier Maersk vessel. Maersk takes delivery of first methanol-capable vessel in 9,000-teu series  

Tangier Maersk is the first of six mid-size container ships with methanol-capable dual-fuel engines.

IBIA MFM bunkering training course graphic. IBIA to run surveyor training course for mass flow meter-equipped bunkering in Rotterdam  

One-day course scheduled for 19 February aims to prepare professionals for MFM-equipped bunkering operations.

CO2 carrier vessel aerial view. MOL secures two 12,000-cbm CO2 carriers for Northern Lights expansion  

Japanese shipowner to deliver vessels in 2028 for cross-border carbon transport and storage project.

MOL and ONGC VLEC long-term charter signing. MOL and ONGC sign 15-year charter deal for two ethane carriers  

Japanese shipowner expands fleet to 16 vessels with newbuildings scheduled for delivery in 2028.

Vessels at sea. Dual-fuel container ship and vehicle carrier fleet reaches 400 vessels  

World Shipping Council reports 83% increase in operational dual-fuel vessels during 2025.

Photograph of a blue cargo vessel. Lloyd’s Register publishes first guidance notes for onboard hydrogen generation systems  

Classification society addresses regulatory gap as shipowners explore producing hydrogen from alternative fuels onboard.

Erasmusbrug bridge in Rotterdam. Rotterdam bunker industry faces upheaval as new regulations drive up costs and shift volumes  

Red III compliance costs and a mass flow meter mandate are creating operational challenges across the ARA region.

Neil Chapman, VPS. VPS appoints Neil Chapman as managing director for the Americas  

Maritime services company names industry veteran to lead regional operations and client partnerships.

Oil refinery infrastructure. Maritime industry shifts towards LNG as alternative fuel enthusiasm stalls  

Geopolitical concerns drive shipping leaders to prioritise established fuels over newer alternatives, survey finds.

OceanScore logo. OceanScore reaches $5m annual recurring revenue as emissions compliance demand grows  

Hamburg-based firm supports compliance workflows for more than 2,500 vessels as regulations enter operational phases.





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