Wed 28 Feb 2018, 09:26 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude was down 25 cents, or 0.4 percent, at $66.38 a barrel. On Tuesday, Brent fell 87 cents to $66.63 by 07:55 GMT, U.S. WTI was down $32 cents, or 0.5 percent, at $62.69 a barrel by 07:55 GMT, after falling 90 cents in the previous session. I have decided that the best way to explain what cold weather does to Britain is to use an analogy: snow to Britain is what kryptonite is to Superman. It has totally immobilised things, and has meant that all logic has gone out the window. There has been more snow today, yet more transport is running, how does that work? But what has this got to do with the oil market? Well, seemingly for some, logic has gone of the window, as U.S. rigs increase, U.S. production increases, demand figures elusive, crude prices rise. There is also a new U.S.-Russian rivalry developing. Previously, it was a superstate emergence battle in the 19th century, then a war of ideologies between communism v Western capitalism, the space race, cyber warfare, and now oil. The U.S. is predicted to overtake Russia in production by 2019. With this happening, I'm sure that with their history, Russia is seething at the States's ability to increase production, while Russia is stuck in its agreement with OPEC. Like a caged animal, they will be chomping at the bit to get increasing levels again. Asia industry data has been weak, knocking confidence in their ability to be the powerhouse of the demand growth - especially pertinent for China and India. Let's see what the rest of the week brings.

Fuel Oil Market (February 27)

The front crack opened at -11.50, strengthening to -11.45, before weakening to -11.50, closing -11.45. The Cal 19 was valued at -15.50. .

Asia's high-sulphur fuel oil crack for March widened its discount to Brent crude on Tuesday, slipping to a four-week low amid limited trade activity and weak market sentiment.

The front-month 180 cSt fuel oil crack to Brent settled at minus $8.24 a barrel, its widest discount since Jan. 29 when it was at minus $8.76 a barrel.

The weaker fuel oil crack came despite lower crude prices on Tuesday amid concerns about rising U.S. oil output offsetting signs of stronger demand and faith in the ability of OPEC production curbs to curtail supply.

Market sentiment has been weighed down in recent weeks by sluggish demand and a slight overhang in supplies.

Economic Data and Events

* 12pm: MBA Mortgage Applications, Feb. 23

* 1:30pm: U.S. Personal Consumption, 4Q

* 1:30pm: U.S. GDP, 4Q

* 2:45pm: U.S. Chicago Purchasing Manager, Feb.

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

* EIA releases Petroleum Supply Monthly

* Genscape weekly ARA crude stockpiles report

* Saudi Aramco is expected to release March LPG prices

* Primorsk diesel loading program for March

* Fed Chairman Jerome Powell to testify before House Financial Services Committee

Singapore 380 cSt

Mar18 - 361.50 / 363.50

Apr18 - 361.00 / 363.00

May18 - 360.50 / 362.50

Jun18 - 359.75 / 361.75

Jul18 - 358.75 / 360.75

Aug18 - 357.50 / 359.50

Q2-18 - 360.50 / 362.50

Q3-18 - 357.50 / 359.50

Q4-18 - 351.75 / 354.25

Q1-19 - 343.50 / 346.00

CAL19 - 313.50 / 317.50

CAL20 - 237.00 / 245.00

Singapore 180 cSt

Mar18 - 368.75 / 370.75

Apr18 - 368.00 / 370.00

May18 - 367.50 / 369.50

Jun18 - 366.75 / 368.75

Jul18 - 365.75 / 367.75

Aug18 - 364.50 / 366.50

Q2-18 - 367.50 / 369.50

Q3-18 - 364.50 / 366.50

Q4-18 - 358.75 / 361.25

Q1-19 - 351.25 / 353.75

CAL19 - 323.00 / 327.00

CAL20 - 253.00 / 261.00

Rotterdam Barges

Mar18 348.00 / 350.00

Apr18 348.50 / 350.50

May18 348.00 / 350.00

Jun18 347.25 / 349.25

Jul18 345.75 / 347.75

Aug18 344.00 / 346.00

Q2-18 348.00 / 350.00

Q3-18 344.00 / 346.00

Q4-18 334.75 / 337.25

Q1-19 326.25 / 328.75

CAL19 290.75 / 294.75

CAL20 220.75 / 228.75


Tsurugidake naming ceremony. MOL holds naming ceremony for fourth LNG dual-fuel VLCC  

Vessel, named Tsurugidake, features an LNG fuel tank with a capacity exceeding 10,000 cbm.

VPS Carbon Reduction seminar graphic. VPS to host Bergen seminar on marine fuel quality, lubricants and decarbonisation regulation  

Free-to-attend event on September 16 will feature speakers from VPS and DNV.

Launching ceremony of Carlotta Cosulich. Cosulich Marine Energy launches third methanol-ready bunker tanker in China  

Carlotta Cosulich launched at Taizhou Maple Leaf Shipyard, leaving one vessel in series still to come.

Carnival Corporation logo. Carnival's CSMART seeks specialist instructor for LNG-as-fuel training in Netherlands  

Role focused on delivering training to through classroom instruction and simulator-based learning.

Port of Galveston. Stabilis Solutions nears 100 LNG bunkering operations at Galveston  

Houston-based supplier highlights its Gulf Coast LNG bunkering record as plans advance for new liquefaction facility.

Central control room at the green methanol plant. Towngas hosts Hong Kong government delegation at Inner Mongolia green methanol plant  

Hong Kong's Transport and Logistics Bureau tours VENEX facility as green methanol capacity scales to 300,000 tonnes.

CMA CGM Notre Dame vessel at Singapore Port. Singapore 12-month bunker calls hit all-time high in July  

TTM calls at world's largest bunkering hub reach record levels despite softer sales volumes.

Cargo port in Singapore. Singapore T3M bunker sales stay below 14m tonnes for fourth month running  

Rolling three-month volumes remain subdued despite modest month-on-month recovery in July.

Shore power system launch at Port of Callao. Peru’s Port of Callao launches first shore power system in Latin America  

DP World Callao’s onshore power supply system could cut over 6,300 tonnes of CO₂ annually.

Aristodimos vessel. New Times Shipbuilding delivers LNG dual-fuel crude oil tanker to Capital  

Chinese yard hands over 155,500-dwt vessel in ceremony attended by owner’s representative.