Thu 21 Jun 2018, 10:17 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed last night down $0.34 to $74.74 and WTI closed at $66.22 up $0.37. Well, it seems fitting that Summer solstice is upon us and the longest day of the year is more than likely to mean to mean the longest meeting of the year in Vienna. The market seems like it is stuck between a rock and a hard place and, quite frankly, I don't understand why. Granted, there are many things we don't understand, like why we don't we eat turkey eggs or how Silvio Berlusconi still allowed to run in Italian politics, but alas some things are just not explainable. EIA data was a bit odd last night; sizeable draws on crude which yielded higher product inventories owing to a 1% rise in refinery utilisation. Refinery utilisation in the US is at a mahoosive 96.7%, - about 4% higher than this time last year. The worrying thing, however, is that gasoline demand was down 0.5mnbpd. I know driving season isn't in full swing but is everyone getting a Tesla driven Uber or what? I'm sure we have a volatile day in front of us as rumours and tweets circulate throughout the course of the next 48 hours. All eyes on Vienna. Good day.

Fuel Oil Market (June 20)

The front crack opened at -9.95, weakening to -10.10, before strengthening to -9.60, closing -9.85. The Cal 19 was valued at -16.25.

Asia's 180 cSt fuel oil crack at a discount of $5.41 a barrel on Wednesday reflected the narrowest discount in two weeks as stronger fundamentals could have countered the high oil prices which typically weighs on oil products margins.

Fujairah fuel oil stocks in the week ended June 18 for instance fell 8.8 percent of 861,000 barrels to a two-week low of about 8.9 million barrels. Overall, East Asia is expected to receive less than 6 million tonnes of fuel oil in June, down from a six-month high in May at up to 6.7 million tonnes.

The lower incoming volumes were due largely to fewer cargoes coming to Asia from the West. Japan's refinery utilization rate was down 2.8 percentage point in the week to June 16 to hit its lowest in nearly three years, official data showed.

Economic data/events (Times are London.)

* 12 p.m.: Bank of England Bank Rate, survey 0.5%, prior 0.5%

* 1:30pm: U.S. Initial Jobless Claims, est. 220k (prior 218k)

* 1:30pm: U.S. continuing claims for June 9, est. 1710k (prior 1697k)

* 2pm: FHFA house price index for April, est. 0.5% (prior 0.1%)

* 2:45pm: Bloomberg consumer comfort for June 17 (prior 55.8)

* 3pm: Leading index for May, est. 0.4% (prior 0.4%)

* Today: Singapore onshore oil-product stockpile data

** Russian refining maintenance schedule from ministry

** OPEC's international seminar, final day

** API's monthly statistical report

Singapore 380 cSt

Jul18 - 419.50 / 421.50

Aug18 - 414.25 / 416.25

Sep18 - 409.00 / 411.00

Oct18 - 404.50 / 406.50

Nov18 - 400.75 / 402.75

Dec18 - 397.25 / 399.25

Q3-18 - 414.25 / 416.25

Q4-18 - 401.00 / 403.00

Q1-19 - 390.50 / 393.00

Q2-19 - 378.00 / 380.50

CAL19 - 356.25 / 359.25

CAL20 - 282.00 / 287.00

Singapore 180 cSt

Jul18 - 430.25 / 432.25

Aug18 - 425.00 / 427.00

Sep18 - 420.00 / 422.00

Oct18 - 415.50 / 417.50

Nov18 - 411.75 / 413.75

Dec18 - 408.25 / 410.25

Q3-18 - 425.00 / 427.00

Q4-18 - 412.00 / 414.00

Q1-19 - 402.00 / 404.50

Q2-19 - 391.00 / 393.50

CAL19 - 371.50 / 374.50

CAL20 - 305.50 / 310.50

Rotterdam 3.5%

Jul18 - 401.00 / 403.00

Aug18 - 397.25 / 399.25

Sep18 - 392.75 / 394.75

Oct18 - 388.00 / 390.00

Nov18 - 383.75 / 385.75

Dec18 - 379.75 / 381.75

Q3-18 - 397.00 / 399.00

Q4-18 - 383.75 / 385.75

Q1-19 - 373.50 / 376.00

Q2-19 - 360.00 / 362.50

CAL19 - 335.50 / 338.50

CAL20 - 268.50 / 273.50

BP  

Peninsula 2026 graduate cohort. Peninsula welcomes 2026 graduate cohort across global bunkering network  

Bunker firm brings new graduates into roles spanning Houston, Singapore, Gibraltar, Monaco and Las Palmas.

Mathias Krogsgard, Malik Supply. Malik Supply appoints Mathias Krogsgård as bunker trader  

Danish bunker firm adds trader with export and technology background to growing team.

Jeroen De Vos, Peninsula. Biofuel adoption in shipping shifts from debate to delivery, says Peninsula's Jeroen de Vos  

Marine biofuels have moved from pilot projects to routine fuel strategy, argues IBIA vice-chair.

KEPCO E&C and KR signing. KEPCO E&C and Korean Register of Shipping to collaborate on marine SMR development  

Korean firms to develop technical standards and certification pathways for the BANDI offshore small modular reactor.

Ship-to-ship (STS) LNG bunkering operation at the Port of Sagunto. Peninsula completes first LNG bunkering operation at Sagunto  

Levante LNG bunkering vessel supplies K Line car carrier in landmark delivery.

Person signing a document. India and EU sign letter of intent for green shipping corridor coalition  

India's Ministry of Ports, Shipping and Waterways and EU partners have agreed to develop green ammonia and methanol trade links.

CMA CGM Gold naming ceremony. CMA CGM takes delivery of methanol dual-fuel newbuild  

13,000-TEU CMA CGM Gold uses conventional fuels as well as alternative fuels, including biomethanol and e-methanol.

Mass flow meter (MFM) system installation on Storholmen vessel. TFG Marine meets 2026 target to equip 90% of bunkering fleet with mass flow meters  

Installation aboard the Storholmen takes MFM deployment across its global fleet to more than 90%.

World Fuel logo. World Fuel seeks marine fuel sales executive in Singapore  

Role requires more than five years' experience in bunkering, trading, energy or commodities.

Th'ailib vessel. MISC names first of three new LNG carriers for QatarEnergy charter deal  

Th'ailib, chartered to QatarEnergy for 15 years, extends MISC's long-term LNG fleet partnership with the energy producer.