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


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.

Stanley George, VPS Group Technical and Science Manager, VPS. How to engineer and manage green shipping fuels | Stanley George, VPS  

Effective management strategies and insights for evolving fuel use.


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