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  

Decab Hub and MMMCZCS logos. Lloyd’s Register and Maersk Mc-Kinney Møller Center launch ammonia safety and training resources for shipping  

New tools aim to help operators build the safety management and competency frameworks needed for ammonia-fuelled vessels.

Kevin Dohmen, IBT Bunkering & Trading. IBT Bunkering & Trading appoints Kevin Döhmen to manage new Singapore office  

Döhmen tasked with developing IBT’s operation in the Asian city-state.

Peak Skarv 3 vessel. Peak takes delivery of third S-class vessel and cuts steel for ammonia-fuelled ship  

Norwegian operator marks two events at Chinese yard as ammonia-powered newbuild programme advances.

Launching ceremony of Minerva Helen. New Times Shipbuilding launches LNG dual-fuel tanker for Minerva  

112,500-dwt Minerva Helen launched at shipyard in Jiangsu, China.

Hansa Drejoe vessel. Leonhardt & Blumberg equips first of four newbuilds with Econowind VentoFoils  

German shipowner installs wind-assisted propulsion technology aboard general cargo vessel Hansa Drejoe.

Green Pearl vessel at Port of Civitavecchia. Axpo and Vitol launch LNG bunkering at the Port of Civitavecchia  

Operation marks the extension of Axpo’s LNG bunkering network to third major Italian port.

Grande Pacifico vessel. Grimaldi takes delivery of ammonia-ready Grande Pacifico  

9,800-ceu ship is the largest PCTC in the Neapolitan Group’s fleet and the first of five sister vessels on order.

Regional seminar on alternative fuels and new technologies. IMO seminar in Trinidad and Tobago trains Caribbean maritime educators for the alternative fuels era  

A five-day regional seminar in Port of Spain addressed ammonia, methanol and hydrogen training for seafarers.

Summit Arbutus vessel. Corvus Energy wins 40 MWh battery contract for BC Ferries’ new biofuel-compatible Summit Class vessels  

Norwegian battery supplier to power four new hybrid-electric ferries for Canada’s BC Ferries.

Fleetzero Leviathan Battery Energy Storage System (BESS). ABS issues product design assessment for Fleetzero’s Leviathan battery system  

The first US-manufactured lithium iron phosphate marine battery system receives classification society approval.