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Wed 2 May 2018 08:08

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed last night at $73.13 and WTI closed at $67.25. Brent is stuttering as it struggles to break out above $75 per bbl. I wonder though: Q1 saw us more or less trading in a $65-$70 per bbl range; Q2 so far has seen us trade in more or less a $70 -$75 range. Does that mean Q3 is $75-$80 and Q4 $80-$85? Or is it really not that rudimentary? I think the time has passed to justify whether crude oil prices should be up here. I'm pretty sure we will flirt with some wild numbers over the course of the next ten days until POTUS decides whether to reimpose sanctions on Iran. Mr Netanyahu has certainly put the cat amongst the pigeons, it seems, so we will have to wait and see the course of action Trump decides. What else is going on? EIA data is out later. Apparently, we will see a build on crude and gasoline according to API. That's not particularly encouraging for the bulls who trade against numbers still, but there is some light at the end of the tunnel with Cushing stocks declining by 750kb. With driving season around the corner, any builds on gasoline could cause this market to decline, and decline fast.

Fuel Oil Market (May 01)

The front crack opened at -12.75, strengthening to -12.25, before weakening to -12.30, closing -12.25. The Cal 19 was valued at -16.95.

Economic Data and Events: (Times are London.)

* 12pm: MBA Mortgage Applications for April 27 (prior -0.2%)

* 1:15pm: ADP Employment Change for April, est. 198k (prior 241k)

* 3:30pm: DOE U.S. Crude Inventories for April 27

** TOPLive blog coverage begins 3:20pm

* 7pm: FOMC Rate Decision

** Russia public holiday

** Russia issues monthly oil production, exports data for April

** Genscape weekly ARA crude stockpiles report

** Saudi Aramco may issue June OSPs as soon as May 2, or later in week

** North Sea Brent loading program for June

** Revised/final CPC loading program for May could emerge as soon as today

Singapore 380 cSt

Jun18 - 401.25 / 403.25

Jul18 - 398.25 / 400.25

Aug18 - 395.50 / 397.50

Sep18 - 392.75 / 394.75

Oct18 - 389.75 / 391.75

Nov18 - 386.75 / 388.75

Q3-18 - 395.50 / 397.50

Q4-18 - 387.00 / 389.00

Q1-19 - 376.50 / 379.00

Q2-19 - 366.00 / 368.50

CAL19 - 338.75 / 341.75

Singapore 180 cSt

Jun18 - 413.00 / 415.00

Jul18 - 410.00 / 412.00

Aug18 - 407.00 / 409.00

Sep18 - 404.00 / 406.00

Oct18 - 401.00 / 403.00

Nov18 - 397.75 / 399.75

Q3-18 - 407.00 / 409.00

Q4-18 - 398.25 / 400.25

Q1-19 - 388.00 / 390.50

Q2-19 - 377.75 / 380.25

CAL19 - 353.00 / 356.00

Rotterdam Barges

Jun18 - 387.00 / 389.00

Jul18 - 384.00 / 386.00

Aug18 - 380.50 / 382.50

Sep18 - 376.75 / 378.75

Oct18 - 372.75 / 374.75

Nov18 - 368.50 / 370.50

Q3-18 - 380.50 / 382.50

Q4-18 - 368.50 / 370.50

Q1-19 - 358.00 / 360.50

Q2-19 - 345.75 / 348.25

CAL19 - 318.75 / 321.75
Lease agreement between Inter Terminals Sweden and the Port of Gothenburg, signed on July 1st. Pictured: Göran Eriksson, CEO of the Port of Gothenburg (left) and Johan Zettergren, Managing Director of Inter Terminals Sweden (right). New Gothenburg lease an opportunity to expand green portfolio: Inter Terminals  

Bunker terminal operator eyes tank conversion and construction projects for renewable products.
Map of US Gulf. Peninsula extends US Gulf operation offshore  

Supplier to focus on Galveston Offshore Lightering Area (GOLA) in strategy to serve growing client base.
The M/T Jutlandia Swan, operated by Uni-Tankers. Uni-Tankers vessel gets wind-assisted propulsion  

Fourth tanker sails with VentoFoil units as manufacturer says suction wing technology is gaining traction.
Port of Gothenburg Energy Port. Swedish biomethane bunkered in Gothenburg  

Test delivery performed by St1 and St1 Biokraft, who aim to become large-scale suppliers.
Image from Cockett Marine Oil presentation. Cockett to be closed down after 45 years  

End of an era as shareholders make decision based on 'non-core nature' of Cockett's business.
Petrobras logo. Petrobras confirms prompt availability of VLS B24 at Rio Grande  

Lead time for barge deliveries currently five days.
Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.
Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.
Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.
Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

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