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


Philippe Berterottière and Matthieu de Tugny. GTT unveils cubic LNG fuel tank design for boxships with BV approval  

New GTT CUBIQ design claims to reduce construction time and boost cargo capacity.

Wilhelmshaven Express, Hapag-Lloyd. Hapag-Lloyd secures multi-year liquefied biomethane supply deal with Shell  

Agreement supports container line's decarbonisation strategy and net-zero fleet operations target by 2045.

Dual-fuel ship. Dual-fuel vessels will dominate next decade, says Columbia Group  

Ship manager predicts LNG-powered vessels will bridge gap until zero-carbon alternatives emerge.

Stril Poseidon vessel. VPS campaign claims 12,000 tonnes of CO2 savings across 300 vessels  

Three-month efficiency drive involved 12 shipping companies testing operational strategies through software platform.

Birdseye view of a ship. Gard warns of widespread cat fines surge in marine fuel  

Insurer reports elevated contamination levels, echoing VPS circular in early September.

Christoffer Ahlqvist, ScanOcean. ScanOcean opens London office to expand global bunker trading operations  

New office will be led by Christoffer Ahlqvist, Head of Trading.

Aurora Expeditions' Sylvia Earle. Aurora Expeditions claims 90% GHG reduction in landmark HVO trials  

Sylvia Earle said to be the first Infinity-class ship to trial HVO biofuel.

Molslinjen ferry illustration. Wärtsilä wins contract for electric propulsion systems on two Danish ferries  

Technology group to supply integrated electric systems for Molslinjen's battery-electric catamarans.

Manja Ostertag, Bunker Holding. Bunker Holding executive to address biofuels at Berlin event  

Manja Ostertag will discuss production scaling and supply chain integration at September forum.

Svitzer Ingrid tugboat naming ceremony. Denmark's first electric tug named as Svitzer advances decarbonisation goals  

Svitzer Ingrid said to reduce annual CO₂ emissions by 600-900 tonnes using battery power.





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