Wed 25 Apr 2018, 09:03 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed last night down $0.02 to $73.86 and WTI closed at $67.70. As the oil market settles down again after another busy MPGC, the price of Brent seems to be settling down to and enjoying a $70 handle. It all went a bit nuts at one point, didn't it? I was really starting to believe that we'd break the $75.60 resistance and be on our way to the lofty $85 per bbl as the rally seemed relentless. I thought the market might react on the back of the Macron/ Trump meeting regarding Iran but, as with any news that isn't of a bullish nature, it is ignored in the same way your wife ignores you the whole day yesterday after a very late finish on Monday night. Awkward. It's Wednesday, so we all know what that means: EIA data. Apparently, we will see a build on crude and draws on everything else. I read yesterday that China are buying more crude oil than ever, but they also have more products to sell than ever. So, good for crude demand, but will flood the products market. Fixing one problem and then causing another. Anyway, watch Brent/WTI; it's trading -6.16 at time of writing and Cushing stocks later could blow it further... who knows.

Fuel Oil Market (April 24)

The front crack opened at -14.20, strengthening to -14.15, before weakening to -13.60, closing -14.30. The Cal 19 was valued at -17.10.

Asia's 380 cSt high-sulphur fuel oil market jumped on Tuesday on signs of tight finished grade supplies of the fuel after reports that some off-specification quantities of the fuel were circulating in the bunker fuels market on Monday. Cash premiums for 380 cSt soared to an 11- month high on Tuesday amid elevated deal values in the Singapore trading window, while the front-month time spread of the fuel jumped to its highest since October.

Spot ex-wharf premiums for 380 cSt fuel also surged to as high as $10 a tonne on Tuesday amid strong buying interest for the break-bulk cargoes of the fuel and limited supplier offers. With the Singapore fuel oil market already tightening over the past weeks amid rising seasonal demand for the fuel, the fuel oil market could sustain these elevated price levels for at least some weeks.

Economic Data and Events: (Times are London.)

* 3:30pm: EIA weekly oil inventory report; TopLive blog starts at 3:20pm

* CWC's China LNG and Gas International Summit in Beijing. Day one of two. Speakers include Exxon, Shell, Cnooc, CNPC, Cheniere Marketing, Petronas

* AIPN summit in London, final day

* Argus Marpol summit in Houston, final day

* Russia Urals preliminary loading plan for May

** See OIL WEEKLY AGENDA for this week's events

Singapore 380 cSt

May18 - 389.00 / 391.00

Jun18 - 387.00 / 389.00

Jul18 - 385.00 / 387.00

Aug18 - 382.75 / 384.75

Sep18 - 380.75 / 382.75

Oct18 - 378.25 / 380.25

Q3-18 - 382.75 / 384.75

Q4-18 - 375.75 / 377.75

Q1-19 - 366.75 / 369.25

Q2-19 - 359.50 / 362.00

CAL19 - 333.50 / 336.50

CAL20 - 268.00 / 273.00

Singapore 180 cSt

May18 - 398.75 / 400.75

Jun18 - 396.75 / 398.75

Jul18 - 395.00 / 397.00

Aug18 - 393.00 / 395.00

Sep18 - 391.00 / 393.00

Oct18 - 389.00 / 391.00

Q3-18 - 393.00 / 395.00

Q4-18 - 386.75 / 388.75

Q1-19 - 378.00 / 380.50

Q2-19 - 371.00 / 373.50

CAL19 - 348.00 / 351.00

CAL20 - 292.00 / 297.00

Rotterdam Barges

May18 - 374.25 / 376.25

Jun18 - 373.50 / 375.50

Jul18 - 371.75 / 373.75

Aug18 - 369.00 / 371.00

Sep18 - 365.75 / 367.75

Oct18 - 362.00 / 364.00

Q3-18 - 368.75 / 370.75

Q4-18 - 358.25 / 360.25

Q1-19 - 349.25 / 351.75

Q2-19 - 338.50 / 341.00

CAL19 - 313.50 / 316.50

CAL20 - 243.00 / 248.00

LNG  

Eleven Energy logo. Eleven Energy recruiting trader for new Singapore office  

Saudi bunkering firm looking to hire in Asian city-state ahead of planned January 2027 start date.

Singapore skyline. VPS advertises for bunker surveyor role in Singapore  

Testing and inspection firm seeks candidate to conduct bunker fuel surveys under Singapore Standards SS 648 and SS 600.

RCL vessels naming ceremony. RCL names first three of eight dual-fuel-ready 4,488-TEU vessels in China  

Regional Container Lines takes delivery of Anitta Bhum on day of naming ceremony.

Peak Skarv 4 vessel. Skarv Shipping completes newbuilding programme with delivery of ammonia-ready Peak Skarv 4  

Short-sea operator takes delivery of fourth vessel from Huanghai Shipyard, with ammonia-fuelled vessel next.

Diamond Gas Nexus vessel. NYK names dual-fuel LNG carrier for Cameron LNG project  

New vessel to support LNG transportation for US project in which Mitsubishi Corporation and NYK participate.

ULSTEIN SX222 offshore wind vessel render. PaxOcean signs design contract with Ulstein for methanol-ready offshore wind vessel  

PaxOcean and Ulstein agree design contract for an SX222 service operation vessel, prepared for methanol and electric operations.

NYK and IMO officials. NYK shares two years of ammonia-fuelled tugboat data with IMO  

Shipping company presents operational insights from Sakigake and updates on its ammonia-fuelled gas carrier at IMO session.

Type approval test (TAT) for H35CDF engine. HD Hyundai completes type approval test for new LNG dual-fuel engine  

Latest HiMSEN engine is claimed to offer reduced methane slip compared with previous models.

Flag of Brazil. Petrobras resumes bunkering operations at Rio Grande Terminal after power restoration  

Brazilian supplier restarts marine fuel supply after completing an inspection following an electricity outage.

Stena E-Flexer vessel render. Stena RoRo orders battery-ready E-Flexer 2.0 ferries from Chinese yard  

Vessels include diesel engines capable of running on biodiesel and are methanol-ready.