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  

Bermuda Container Line (BCL) logo. Bermuda Container Line imposes emergency bunker surcharge citing Iran War fuel price spike  

Shipping operator to add $150 per TEU charge from 1 May amid geopolitical fuel cost pressures.

China flag. Zhejiang’s first methanol-powered container ship launches in Jiaxing  

Vessel uses methanol propulsion technology to reduce carbon dioxide emissions by 90%.

TES flag with a model vessel in the background. TES joins SEA-LNG coalition to advance e-methane as marine fuel  

Green energy company targets 1m tonnes annual e-methane production by 2030 for shipping decarbonisation.

Ethanol and methanol workshop graphic. IBIA to host workshop on ethanol and methanol marine fuels during Singapore Maritime Week  

Half-day event will examine alcohol-based fuel pathways and integration into shipping’s multi-fuel landscape.

Steel-cutting ceremony for 13,000-dwt vessel. ROC begins construction of second chemical tanker for Essberger  

Chinese shipbuilder holds steel-cutting ceremony for 13,000-dwt methanol-ready vessel with ice class capability.

Norsepower and CHIC sign agreement. Norsepower and Cosco Shipping Heavy Industry Equipment sign wind propulsion cooperation agreement  

Wind propulsion technology provider partners with Chinese shipyard to scale rotor sail production.

Wärtsilä logo. Shipping firms struggle to prioritise decarbonisation investments amid regulatory uncertainty, Wärtsilä survey finds  

Survey of 225 maritime executives reveals 70% say uncertainty hinders investment decisions despite regulatory pressure.

IMT Isca G-Flex vessel render. Longitude Engineering unveils IMT Isca G-Flex PSV design with alternative fuel capability  

Naval architecture firm launches adaptable platform support vessel design based on the IMT-984 G-Class hull.

Philippos Ioulianou, EmissionLink. Shore power infrastructure is key to cutting ferry emissions in European cities, says EmissionLink  

Port electrification is needed to enable vessels to switch off engines at berth, reducing urban pollution.

Maritime and Port Authority of Singapore logo. Singapore prioritises maritime resilience amid geopolitical uncertainty, eyes digitalisation and green fuels  

MPA chief outlines the sector’s adaptation to supply chain disruptions while advancing automation and alternative fuels.