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  

Factory Acceptance Testing (FAT) for X52DF-A-1.0 engine. WinGD completes factory testing of ammonia-fuelled engine for LPG carrier  

X52DF-A-1.0 engine tested in China ahead of installation on first of four vessels under construction.

Drift Energy energy-harvesting ship render. RINA awards first approval in principle for energy-harvesting ship  

Drift Energy receives certification for vessel design that generates clean energy at sea.

MSC World Europa vessel. MSC Cruises achieves flag state recognition for verified methane emissions data  

Bureau Veritas certifies actual methane slip values for two LNG-fuelled cruise ships.

IBIA and EENMA MoU signing. IBIA and Greek shortsea shipowners sign cooperation agreement  

The International Bunker Industry Association partners with EENMA to support the marine fuels sector.

Hapag-Lloyd and Scan Global Logistics logos. Scan Global Logistics and Hapag-Lloyd expand biofuel partnership to cut shipping emissions  

Collaboration claims to avoid 8,500 tonnes of CO₂e emissions through second-generation biofuels.

Lapis Ace ship-to-ship LNG bunkering operation. MOL signs first annual LNG bunkering contract for car carriers in Vancouver  

Japanese shipping company secures year-round fuel supply with Seaspan Energy at Canadian port.

Gasum's LNG bunkering vessel Coralius. Gasum’s maritime bio-LNG sales surge from 0.8% to 12.3% in 2025  

Nordic energy company attributes growth to FuelEU Maritime regulation introduced in 2025.

Port Authority of Valencia board meeting. Valenciaport gives LNG bunkering go-ahead to Shell and Axpo Iberia  

Port authority approves two LNG bunkering authorisations as part of its decarbonisation strategy.

Northern Purpose naming ceremony. BSM enters LCO₂ carrier segment with management of dual-fuel Northern Purpose  

Bernhard Schulte Shipmanagement takes over first liquefied carbon dioxide carrier for Northern Lights project.

Anna Cosulich vessel. Fratelli Cosulich takes delivery of methanol-ready bunker tanker Anna Cosulich  

Vessel built in China will head to Singapore to support group's bunkering operations.