Mon 29 Jan 2018 09:13

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude futures held above $70 per barrel, but were down by $19 cents from their last close at $70.34 a barrel at 07:49 GMT. U.S. WTI crude futures were at $66.19 a barrel, up $5 cents. Fantastic scenes from Roger Federer at the Australian Open, somehow he just manages to keep on going. It's a bit like the oil market, surely it just can't keep on going up, when will the reality of the situation bring it crashing down? The story of the U.S. dollar is an interesting factor, too. I've been so used to it at $1.3 to the pound that checking the level was a surprise up at $1.42. The description of U.S. fiscal policy as 'loose' by the media is a kind description and the resulting weakening of the currency seems to go against the aims of the current administration. Again it seems to be a toss up between two factors: the expectation that U.S. production will break the 10mil bpd and the technicals showing that there is still room for more upward movement. (Technical jargon time: there is this wave named after a bloke called Elliott, and he really likes the number 5; the next move up on Brent would signal this 5, proving that everything will move up higher). Think the market has shown a top out level just over $71, and perhaps a correction back to $68 with the emphasis on the U.S. production.

Fuel Oil Market (January 26)

The front crack opened at -11.65, weakening to -11.80, moving back to -11.65, closing at -11.70. The Cal 19 was valued at -16.00.

Asia's front-month visco spread climbed to a near sixmonth high on Friday after nearly three weeks of sustained buying interest, trade and broker sources said.

This came despite limited signs of narrowing low-viscosity fuel oil supplies, according to some industry participants. Earlier in January, the front-month visco spread sank to a near two-year low amid declining demand for lowviscosity fuel oils after Pakistan said it had indefinitely suspended fuel oil imports.

Fuel oil stocks in the ARA oil hub jumped 28 percent, or 232,000 tonnes, from the previous week to a five-week high of 1.048 million tonnes in the week ended Jan. 25, data from Dutch consultancy PJK International showed. A closed arbitrage from Europe to Asia Pacific drove fuel oil stocks higher.

Economic Data and Events

* Chatham House Middle East & North Africa Energy conference, London; speakers include Iraq Oil Minister Jabbar Al-Luaibi, Libya National Oil Corp. Chairman Mustafa Sanalla, ENI CEO Claudio Descalzi; 1st day of 2

* Oseberg loading program for March

* BHGE annual meeting, Florence, featuring executives from Saudi Aramco, Shell, EnQuest, Rosneft, Eni, 1st day of 2

* Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday's EIA report

Singapore 380 cSt

Feb18 - 382.50 / 384.50

Mar18 - 382.50 / 384.50

Apr18 - 382.00 / 384.00

May18 - 381.50 / 383.50

Jun18 - 380.75 / 382.75

Jul18 - 379.50 / 381.50

Q2-18 - 381.25 / 383.25

Q3-18 - 377.50 / 379.50

Q4-18 - 372.00 / 374.50

Q1-19 - 362.75 / 365.25

CAL19 - 322.50 / 325.50

CAL20 - 255.25 / 260.25

Singapore 180 cSt

Feb18 - 388.50 / 390.50

Mar18 - 388.25 / 390.25

Apr18 - 388.00 / 390.00

May18 - 387.50 / 389.50

Jun18 - 386.75 / 388.75

Jul18 - 385.50 / 387.50

Q2-18 - 387.25 / 389.25

Q3-18 - 383.75 / 385.75

Q4-18 - 378.00 / 380.50

Q1-19 - 368.75 / 371.25

CAL19 - 330.50 / 333.50

CAL20 - 264.50 / 269.50

Rotterdam Barges

Feb18 368.00 / 370.00

Mar18 369.00 / 371.00

Apr18 368.75 / 370.75

May18 368.00 / 370.00

Jun18 367.00 / 369.00

Jul18 365.50 / 367.50

Q2-18 368.00 / 370.00

Q3-18 363.00 / 365.00

Q4-18 352.75 / 355.25

Q1-19 342.50 / 345.00

CAL19 301.50 / 304.50

CAL20 226.50 / 231.50


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 for India's first LNG bunkering facility at Vizhinjam  

Partnership aims to establish LNG refuelling hub for international vessels at Kerala.

BSM Methanol Firefighting Course training session. BSM launches methanol training courses for seafarers  

Shipmanager introduces specialised programmes amid absence of international standards for methanol-powered vessels.

Everllence S90 methanol dual-fuel engine. Everllence completes world's first S90 methanol engine retrofit on Cosco ship  

Cosco Shipping Libra undergoes dual-fuel conversion, opening pathway for further large-bore retrofits.

RCL vessel Piya Bhum. RCL completes maiden biofuel voyage with B24-VLSFO blend  

Thai container line uses biofuel blend on vessel sailing from Laem Chabang to Ho Chi Minh City.

ABS and KRISO sign MoU. ABS partners with KRISO to develop small modular reactors for marine applications  

Classification society and Korean research institute sign MoU to advance nuclear technology for ships and offshore platforms.

Rolls-Royce first pure methanol marine engine. Rolls-Royce tests first pure methanol marine engine in world first  

Facility test marks development step for methanol marine fuel technology.

OTTCO and Royal Vopak sign strategic partnership agreement. Ottco and Vopak form joint venture for Duqm energy storage terminal  

Partnership will develop storage infrastructure at Oman's Special Economic Zone at Duqm (SEZAD).

China Sustainable Shipping Fuel Development Report 2025. China Classification Society releases sustainable marine fuel report  

Report examines global trends in green hydrogen, methanol, ammonia, and biofuels for maritime decarbonisation.

Steel cutting ceremony for Avenir LNG’s next 20,000 cbm LNG bunkering vessel. Avenir LNG begins construction of second 20,000 cbm bunkering vessel in China  

Steel cutting ceremony marks start of construction for Hull S1124 at Nantong CIMC facility.





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