Mon 16 Apr 2018, 09:13 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent crude oil futures were at $71.78 per barrel at 06:43 GMT, down $ 80 cents, or 1.10 percent, from their last close, and U.S. WTI crude futures were down $ 68 cents, or 1.01 percent, at $66.71 a barrel. Well, things have escalated quickly, and that's not just the price of crude. Geopolitics are reaching a new tension point with the pieces of the chess board being put into play across the Middle East. However, the airstrikes won't be the factor that will really push up this market. Behind this front story is the prospect of the Iran sanctions, which will have the big effect economically and politically. The renegotiation calls have pulled the pin on the grenade; the options now are dropping it or putting the pin back in - watch that space. Let's go back to the fundamentals for a second. US oil rigs were up 7 last week to 815 the highest since March 2015. A trade spat between China and the US could significantly affect the market: a 1 percent decline in global GDP growth would result in a reduction in demand growth by 690,000 bpd.

Fuel Oil Market (April 13)

The front crack opened at -12.40, weakening to -12.50, before strengthening to -12.45, closing at -12.85. The Cal 19 was valued at -14.70.

Sentiment in the 380 cSt fuel oil market continued to show signs of improvement on Friday with the frontmonth 380 cSt time spread widening its backwardation, and the May crack to Brent crude holding steady despite rising crude oil prices. However, the improved 380 cst market and weaker 180-cst prices weighed on the frontmonth viscosity spread on Friday despite Pakistan's PSO this week announcing it would seek to import up to 865,000 tonnes of low-viscosity fuel oil in May and June.

Singapore marine fuel sales in the first quarter climbed to a record high in 2018 despite lower volumes of year-onyear March sales. Singapore marine fuel sales in the first quarter totalled a record 12.91 million tonnes this year, up 2 percent from the previous record.

Economic Data and Events

* Kuwait Oil and Gas Summit, Kuwait City, with speakers to include OPEC Secretary-General Mohammad Barkindo and oil ministers from Kuwait, Bahrain, Oman, 1st day of 2

* EIA's Monthly Drilling Productivity Report

* Angola preliminary crude program for June

* Russia 5-day Urals program for May

* BP publishes its sustainability report

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

* Bloomberg forecast of U.S. waterborne LPG exports

Singapore 380 cSt

May18 - 381.50 / 383.50

Jun18 - 380.75 / 382.75

Jul18 - 380.00 / 382.00

Aug18 - 378.25 / 380.25

Sep18 - 376.50 / 378.50

Oct18 - 374.75 / 376.75

Q3-18 - 378.25 / 380.25

Q4-18 - 372.00 / 374.00

Q1-19 - 363.75 / 366.25

Q2-19 - 356.50 / 359.00

CAL19 - 333.25 / 336.25

CAL20 - 275.25 / 280.25

Singapore 180 cSt

May18 - 391.25 / 393.25

Jun18 - 390.75 / 392.75

Jul18 - 390.50 / 392.50

Aug18 - 389.00 / 391.00

Sep18 - 387.25 / 389.25

Oct18 - 385.50 / 387.50

Q3-18 - 389.00 / 391.00

Q4-18 - 383.00 / 385.00

Q1-19 - 375.00 / 377.50

Q2-19 - 369.00 / 371.50

CAL19 - 348.25 / 351.25

CAL20 - 299.25 / 304.25

Rotterdam Barges

May18 369.50 / 371.50

Jun18 368.75 / 370.75

Jul18 367.00 / 369.00

Aug18 364.75 / 366.75

Sep18 362.00 / 364.00

Oct18 - 358.50 / 360.50

Q3-18 364.50 / 366.50

Q4-18 354.75 / 356.75

Q1-19 346.50 / 349.00

Q2-18 336.75 / 339.25

CAL19 315.25 / 318.25

CAL20 254.25 / 259.25

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.