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Thu 19 Apr 2018, 09:05 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed last night up $1.90 to $73.48, and WTI closed at $68.72, up $2.20. Sometimes things in life are just beyond your control and you can do nothing about it. The classic death and taxes line comes to mind. This morning's oil market version of the Telegraph cryptic crossword is an article about the two grades of 0.5% sulphur bunker blends. 1 Down: Paraffinic grade, straight-run refinery processes, without cracked components. Pour point of 33 degrees Celsius, density of 933 and viscosity of 218 CST. 10 across: Aromatic grade, cracked blend of mainly visbreaker residue, light cycle oils, catalytic cracker and hydrocracker bottoms. Pour point of 9 degrees Celsius. Driving season is just around the corner and who is going to get in their V8 Chevy Silverado (or any other luxury brand of pickup truck so that my neutrality is kept intact), and fill up on 3 dollar gas to go and see Auntie Mable? It doesn't matter about how much the US are producing or if the tensions in the middle are dissipating or if actual demand figures are coming under what was forecast 5 months ago. The market is now seemingly totally detached from the fundamentals. But why does it matter? Higher prices work for everyone apart from the consumer, but sooner or later Joe the Plumber will make his voice heard.

Fuel Oil Market (April 18)

The front crack opened at -12.75, strengthening to -12.60, before weakening to -13.15. The Cal 19 was valued at -14.80.

Expectations of tighter supplies over the near-term helped lift the front-month East-West arbitrage spread on Wednesday. The May 380 cSt fuel oil discount to Brent crude was also slightly firmer despite the rise in crude prices. Fujairah fuel oil inventories rose 2 percent to a three-month high of 8.628 million barrels (about 1.288 million tonnes) in the week to April 16.

Economic Data and Events

* 1:30pm: Philadelphia Fed Business Outlook, April

* 1:30pm: U.S. Continuing Claims, April 7

* 1:30pm: U.S. Initial Jobless Claims, April 14

* 2:45pm: U.S. Bloomberg Economic Expectations, April

* 2:45pm: Bloomberg Consumer Comfort, April 15

* API Monthly Statistical Report

* Columbia University Global Energy Summit, with speakers to include CEOs from ConocoPhillips and Sun Power

* OPEC's Joint Technical Committee meets in Jeddah, Saudi Arabia

* Petrostrategies conference in Paris, with Total CEO Patrick Pouyanne, Saudi Aramco CEO

Singapore 380 cSt

May18 - 393.00 / 395.00

Jun18 -392.25 / 394.25

Jul18 - 391.00 / 393.00

Aug18 - 389.25 / 391.25

Sep18 - 387.25 / 389.25

Oct18 - 385.25 / 387.25

Q3-18 - 389.00 / 391.00

Q4-18 - 382.50 / 384.50

Q1-19 - 373.75 / 376.25

Q2-19 - 366.50 / 369.00

CAL19 - 346.50 / 349.50

CAL20 - 281.50 / 286.50

Singapore 180 cSt

May18 - 404.50 / 406.50

Jun18 - 403.50 / 405.50

Jul18 - 402.00 / 404.00

Aug18 - 400.25 / 402.25

Sep18 - 398.25 / 400.25

Oct18 - 396.25 / 398.25

Q3-18 - 400.00 / 402.00

Q4-18 - 393.50 / 395.50

Q1-19 - 385.00 / 387.50

Q2-19 - 379.00 / 381.50

CAL19 - 361.50 / 364.50

CAL20 - 305.50 / 310.50

Rotterdam Barges

May18 380.25 / 382.25

Jun18 379.75 / 381.75

Jul18 378.25 / 380.25

Aug18 376.25 / 378.25

Sep18 373.50 / 375.50

Oct18 - 370.25 / 372.25

Q3-18 376.00 / 378.00

Q4-18 366.50 / 368.50

Q1-19 358.25 / 360.75

Q2-18 349.25 / 351.75

CAL19 327.00 / 330.00

CAL20 268.00 / 273.00

ESVAGT Robert Boyle vessel at the Port of Immingham. UK's first commercial biomethanol bunkering service launches at Immingham  

Exolum, Methanex and Ørsted partner to supply biomethanol for shipping at the UK's largest port by tonnage.
Vitol Bunkers vessel alongside terminal facility. Vitol Bunkers launches HSFO supply in Pakistan after four-year hiatus  

Company resumes high-sulphur fuel oil bunkering at three Pakistani ports following earlier VLSFO and LSMGO launches.
Aerial view of CIMC SOE shipyard facility. CIMC SOE secures orders for three LNG bunkering vessels  

Chinese shipbuilder adds two 20,000 cbm and one 18,900 cbm LNG bunkering vessels to order book.
HADAG Type 2030e ferry render. Lehmann Marine to supply battery systems for Hamburg’s first electric ferries  

German firm wins contract for three 3.8 MWh systems for HADAG vessels entering service in 2028.
Viking Glory vessel. Viking Line green corridor project marks two years with biogas use and shore power progress  

Turku-Stockholm route partnership reports tenfold increase in renewable biogas use and advancing electrification infrastructure.
MV Blue Alliance vessel. Global Fuel Supply unveils Blue Alliance tanker after Dubai upgrade works  

Marine fuel supplier completes intermediate survey and technical upgrades on vessel ahead of operational service.
Everllence common-rail technology illustration. Everllence common-rail technology surpasses 20 million operating hours  

Engine maker’s common-rail systems reach milestone across 600 engines and 5,500 cylinders over 18 years.
Representatives from LR Advisory and Geogas. LR Advisory appointed by Geogas Trading to develop FuelEU Maritime compliance strategy  

Lloyd’s Register division to support charterer with emissions planning and FuelEU pooling operationalisation.
Photograph of a red container vessel. ICS survey shows maritime leaders favour LNG as industry awaits IMO net-zero vote  

Barometer reveals strategic shift towards conservative fuel choices amid regulatory uncertainty over decarbonisation framework.
Petrobras logo. Petrobras bunker operations to close for Carnival, with higher prices during holiday period  

Brazilian headquarters shut 16-18 February; Rotterdam office to handle new sales during closure.




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