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Tue 24 Apr 2018, 09:05 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent crude oil futures climbed to as high as $75.20 a barrel in early trading on Tuesday - the highest since Nov. 27, 2014. Brent was still at $75 a barrel at 03:11 GMT, up $29 cents, or 0.4 percent, from its last close. U.S. WTI crude futures were at $68.98 a barrel, up $34 cents, or 0.5 percent from their last settlement. I think it's worth listing all the bullish factors that have pushed the market up to its highest levels since November 2014: Iran sanctions potential, Syria and wider Middle East instability, increasing Asian (particularly Chinese) demand, the floated idea of OPEC cut extension, eradication of oil glut, Bloomberg survey showing draw on U.S. inventories ... That's a pretty strong list. The next two weeks are the twilight zone before Trump makes his Iran sanctions deal, which will understandably affect the market greatly. With a $1-3 premium built into current prices in anticipation of a pull out form the deal, a u-turn decision could push us back down to $70 as people profit take and sentiment falls flat. Like the longest game of Countdown ever, the clue this week is 'LFOFGLIESB'. Answers on a postcard.

Fuel Oil Market (April 23)

The front crack opened at -13.55, strengthening to -13.50, before weakening to -13.85, closing -13.80. The Cal 19 was valued at -15.60

Asia's 380 cSt ex-wharf fuel oil premiums were pushed higher on Monday after it emerged that at least one supplier was in possession of an off-specification cargo of the fuel, tightening prompt supplies of the mainstay bunker fuel

The off-spec cargo is expected to lift premiums of the fuel over the short term until suppliers are able to replace the cargo and meet prompt customer demand, the sources said.

Ex-wharf premiums for 380-cst fuel oil were at about $3- $4 a tonne to Singapore quotes on Monday, up from about $2-$3 a tonne to Singapore quotes last week..

Singapore 380 cSt

May18 -395.75 / 397.75

Jun18 -394.00 / 396.00

Jul18 - 392.25 / 394.25

Aug18 - 390.25 / 392.25

Sep18 - 388.00 / 390.00

Oct18 - 386.00 / 388.00

Q3-18 - 390.00 / 392.00

Q4-18 - 383.00 / 385.00

Q1-19 -374.00 / 376.50

Q2-19 - 367.50 / 370.00

CAL19 - 342.25 / 345.25

CAL20 - 276.75 / 281.75

Singapore 180 cSt

May18 - 405.50 / 407.50

Jun18 - 403.75 / 405.75

Jul18 - 402.25 / 404.25

Aug18 - 400.50 / 402.50

Sep18 - 398.25 / 400.25

Oct18 - 396.75 / 398.75

Q3-18 - 400.25 / 402.25

Q4-18 - 394.00 / 396.00

Q1-19 - 385.25 / 387.75

Q2-19 - 379.00 / 381.50

CAL19 - 356.75 / 359.75

CAL20 - 300.75 / 305.75

Rotterdam Barges

May18 381.00 / 383.00

Jun18 380.25 / 382.25

Jul18 378.50 / 380.50

Aug18 376.00 / 378.00

Sep18 372.75 / 374.75

Oct18 - 369.00 / 371.00

Q3-18 375.75 / 377.75

Q4-18 365.25 / 367.25

Q1-19 356.25 / 358.75

Q2-18 345.50 / 348.00

CAL19 322.25 / 325.25

CAL20 258.25 / 263.25

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Exolum, Methanex and Ørsted partner to supply biomethanol for shipping at the UK's largest port by tonnage.
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Company resumes high-sulphur fuel oil bunkering at three Pakistani ports following earlier VLSFO and LSMGO launches.
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Chinese shipbuilder adds two 20,000 cbm and one 18,900 cbm LNG bunkering vessels to order book.
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German firm wins contract for three 3.8 MWh systems for HADAG vessels entering service in 2028.
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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.
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Engine maker’s common-rail systems reach milestone across 600 engines and 5,500 cylinders over 18 years.
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Lloyd’s Register division to support charterer with emissions planning and FuelEU pooling operationalisation.
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Petrobras logo. Petrobras bunker operations to close for Carnival, with higher prices during holiday period  

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