Wed 7 Feb 2018, 09:18 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed down 0.76 last night to $66.86, WTI closed at $63.39, down 0.76. Commentating on this market can sometimes feel like trying to rewire a plug wearing oven gloves... while wearing a welding mask. Pointless. Fundamentally, nothing has really changed in the oil market from yesterday. Nothing. But we are 55c higher. Those guys sitting in their undies that I mentioned yesterday are just sitting there hitting the 'LIFT' button constantly. Actually, I take that back, something has changed from yesterday, and that's what EIA have said about US oil production. 'U.S. oil production is expected to surpass 11 million barrels per day in late 2018, a year earlier than projected last month.' A YEAR! IN A MONTH!! Can you imagine if you went with your partner to go and have a baby scan and they said "Ahhh, it's going to be a girl; all is healthy and your due date is 30th September". Then you get in your car and go into labour. Thanks, doc. Honestly, I want to go into these offices where these analysts get things so wrong. Seriously, how can you adjust production figures up by 1 mbpd in merely a month? Anyway, the EIA also have downgraded their US demand forecast as well, FYI. So 1 mbpd more crude and lower product demand? Yet crude rallies. Hmmm. Make America great again? Well, if 'great' means one of the largest oil suppliers in the world, then yes, I guess so. Stats later, 3.30pm UK time.

Fuel Oil Market (February 5)

The front crack opened at -9.90, weakening to -10.25, before strengthening to -10.10. The Cal 19 was valued at -14.70.

Asia's front-month high-sulphur fuel oil crack narrowed its discount to Brent crude on Tuesday for second straight session as crude oil prices continued to fall, trade sources said.

The March 180 cSt fuel oil crack to Brent crude was trading at about minus $7 a barrel around the end of Asia trading hours, its narrowest discount since Jan. 3 and compared with minus $7.58 a barrel in the previous session. Oil fell for a third day on Tuesday, as a rout in global equities triggered losses across bonds and commodities, although the crude price is in positive territory so far this year.

Meanwhile, cash premiums for 380 cSt fuel oil cargoes fell to a more than two-week low as suppliers accepted lower premiums for cargoes of the fuel amid limited buying interest for the fuel.

Economic Data and Events

* Noon: MBA Mortgage Applications, Feb. 2

* 3:30pm: EIA issues weekly U.S. oil inventory report

Singapore 380 cSt

Mar18 - 371.75 / 373.75

Apr18 - 371.75 / 373.75

May18 - 371.50 / 373.50

Jun18 - 371.00 / 373.00

Jul18 - 369.50 / 371.50

Aug18 - 368.00 / 370.00

Q2-18 - 371.25 / 373.25

Q3-18 - 368.25 / 370.25

Q4-18 - 363.00 / 365.50

Q1-19 - 354.00 / 356.50

CAL19 - 321.75 / 324.75

CAL20 - 254.00 / 259.00

Singapore 180 cSt

Mar18 - 378.00 / 380.00

Apr18 - 378.00 / 380.00

May18 - 377.50 / 379.50

Jun18 - 377.00 / 379.00

Jul18 - 375.75 / 377.75

Aug18 - 374.25 / 376.25

Q2-18 - 377.50 / 379.50

Q3-18 - 374.75 / 376.75

Q4-18 - 369.75 / 372.25

Q1-19 - 362.25 / 364.75

CAL19 - 331.00 / 334.00

CAL20 - 265.00 / 270.00

Rotterdam Barges

Mar18 358.75 / 360.75

Apr18 358.75 / 360.75

May18 358.25 / 360.25

Jun18 357.25 / 359.25

Jul18 355.50 / 357.50

Aug18 353.50 / 355.50

Q2-18 358.25 / 360.25

Q3-18 353.75 / 355.75

Q4-18 344.25 / 346.75

Q1-19 334.75 / 337.25

CAL19 299.00 / 302.00

CAL20 239.75 / 244.75

BP  

Rasmus Frimann Nielsen and Lars Zimmermann, Everllence. Everllence's small-bore GenSet orders surpass 2,000 in 2026  

Engine maker reports strong order intake across its small-bore portfolio, citing demand for reliable, fuel-flexible auxiliary power.

MT Tulip bunker tanker. Bunker One renews MT Tulip charter, plans mass flow meter upgrade in Mauritius  

Bunker One is keeping its bunker tanker in Mauritius while adding flow metering technology to improve delivery transparency.

COP31 panel discussion. Fund for Energy Efficiency Technologies becomes first to adopt revised Singapore-Asia Taxonomy  

FEET's adoption coincides with Lloyd's Register's independent review of GCMD's methodology for quantifying fuel savings from wind-assisted propulsion systems.

Arsenio Dominguez, IMO Secretary-General. IMO chief urges states to enforce safety rules in Strait of Hormuz amid rising attacks  

Arsenio Dominguez says more than 130 attacks on commercial vessels have been verified since February, with at least 25 seafarers killed.

OOCL Wisdom ship-to-ship (STS) bunkering operation at Xiamen Port. Xiamen Port launches 'green methanol bunkering' with OOCL Wisdom  

Boxship received 1,005 tonnes of methanol, corresponding to a reduction of more than 1,600 tonnes in carbon emissions, says COSCO Shipping.

Monjasa Tracer vessel. Monjasa expands fleet with five sister tankers in largest-ever acquisition  

Marine fuel supplier acquires five product tankers from Bernhard Schulte, boosting West African operations and global flexibility.

Molgas Energy logo. Molgas completes acquisition of Prima LNG’s Irish business  

Molgas takes over Prima LNG’s Irish customer portfolio, including a Mondelez manufacturing site, as part of its expansion.

Levante LNG vessel. Peninsula marks three years of LNG bunkering with Levante LNG  

Bunker supplier reports zero claims and CO₂e cuts as LNG bunker vessel completes three years of operations.

Sea Leader FZCO logo. Sea Leader begins physical bunker supply operations in eastern India  

Company completes first bunker delivery after registering with India's shipping authority.

Wega and Deneb vessels render. Auramarine to supply methanol fuel systems for German hydrographic research vessels  

Finnish firm signs deal with Gondan Shipbuilders to equip two new vessels for Germany's maritime agency.