Tue 10 Jul 2018, 12:08 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed up $0.96 last night to $78.07 and WTI closed at $73.85, up $0.05. I'm reading this morning that a possible strike in Norway is causing this market to spike on the back of "possible supply disruptions". Hmmm. Knowing how efficient the people of Norway are, I imagine they will strike for three minutes, come up with a very thorough agreement and be back to work before you can even say 'picket line'. The bulls will jump on any news, though, and crude is trading up this morning. There are still the disruptions in Iran, Libya and Canada giving support like stabilisers to this tricycle of a market. The bulls also ignored comments from H.E. Al Mazrouei yesterday that the UAE can "easily increase production by 400-600,000 bpd". Ignorance is bliss, I suppose.

Fuel Oil Market (Jul 9)

The front crack opened at -9.45, before weakening to -9.60 across the day. The Cal 19 was valued at -15.30.

Asia's prompt-month viscosity spread, the price differential between the prompt-month swaps for 180 cSt and 380 cSt fuel oil grades, slipped to a near four-month low on Monday

Relatively strong 380 cSt fuel oil prices contributed to the weaker viscosity spread amid supply shortages and firm demand for the higher viscosity fuel, trade sources said. The balance-of-July viscosity spread was trading at around $7 a tonne on Monday, down 50 cents a tonne from the previous session and its lowest since March 8.

Economic data/events (Times are London.)

* ~5pm.: EIA STEO with expanded forecast discussion

* 9:30pm: API U.S. oil inventory report

* Bloomberg-compiled REFINERY SNAPSHOT for U.S. and Canada, providing offline capacity projections for crude units and FCCs

Singapore 380 cSt

Aug18 - 456.25 / 458.25

Sep18 - 450.25 / 452.25

Oct18 - 445.75 / 447.75

Nov18 - 443.00 / 445.00

Dec18 - 440.25 / 442.25

Jan19 - 436.50 / 438.50

Q4-18 - 443.00 / 445.00

Q1-19 - 433.00 / 435.00

Q2-19 - 421.75 / 424.25

Q3-19 - 395.00 / 397.50

CAL19 - 400.75 / 403.75

CAL20 - 322.25 / 328.25

Singapore 180 cSt

Aug18 - 463.50 / 465.50

Sep18 - 459.00 / 461.00

Oct18 - 455.75 / 457.75

Nov18 - 453.00 / 455.00

Dec18 - 450.25 / 452.25

Jan19 - 447.50 / 449.50

Q4-18 - 453.00 / 455.00

Q1-19 - 444.25 / 446.25

Q2-19 - 434.00 / 436.50

Q3-19 - 411.00 / 413.50

CAL19 - 416.00 / 419.00

CAL20 - 345.50 / 351.50

Rotterdam 3.5%

Aug18 - 437.00 / 439.00

Sep18 - 432.50 / 434.50

Oct18 - 428.25 / 430.25

Nov18 - 424.25 / 426.25

Dec18 - 420.75 / 422.75

Jan19 - 418.50 / 420.50

Q4-18 - 424.50 / 426.50

Q1-19 - 415.25 / 417.25

Q2-19 - 402.50 / 405.00

Q3-19 - 372.50 / 375.00

CAL19 - 379.00 / 382.00

CAL20 - 305.25 / 311.25

BP  

Methanol bunker fuel delivery. World Fuel Services and West Coast Clean Fuels launch methanol bunkering across US ports  

First over-the-water methanol delivery completed in South Florida with Coast Guard-approved procedures.

Valerie Ahrens. Burando Energies appoints Valerie Ahrens as global head of methanol  

Ahrens brings more than 30 years of energy sector experience to the marine fuels supplier.

New Sea Generation (NSG) logo. New Sea Generation seeks junior bunker trader in Greece  

Greek bunker firm advertises role requiring commitment to demanding work schedule and operational responsibilities.

Person signing a document. IINO Lines secures sustainable shipping finance for methanol dual-fuel VLCC  

Japanese shipowner signs impact financing agreement with Mizuho Bank for alternative-fuel tanker.

Fluxys logo. Fluxys Belgium reports EUR74.9m profit as LNG flows surge and hydrogen infrastructure begins  

Belgian gas infrastructure operator’s 2025 net profit fell 8.8% amid hydrogen and CO₂ investments.

VPS logo. Shale oil components detected in Singapore marine fuel | VPS  

VPS testing identifies 90,000 mt of delivered VLSFO containing Estonian shale oil compounds.

Constantinos Capetanakis, Star Bulk. IBIA chair completes two-year term, citing expansion in regulatory engagement and membership  

Outgoing chair to remain on Global Board and lead Future Fuels and Bunker Buyers’ working groups.

Aerial view of a container vessel. LNG and methanol investments risk becoming 'dead ends' for shipping decarbonisation, UCL study finds  

Research warns transitional marine fuels may lock in fossil infrastructure rather than enabling an ammonia pathway.

Vitalii Protasov, GENA Solutions Oy. Protasov: Renewable fuel supply could meet shipping demand, but offtake agreements remain a barrier  

GENA Solutions CEO highlights project pipeline growth but warns regulatory uncertainty hampers investment decisions.

Frontier Venture vessel. Wah Kwong takes delivery of first LNG-ready LR2 tanker with Bureau Veritas SMART notation  

Frontier Venture is first in newbuild series to achieve Group 3 'augmented ship' capabilities.