Fri 19 Oct 2018, 09:53 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.


Image credit: Freight Investor Services (FIS)
Commentary

Brent crude oil futures were trading at $79.51 per barrel at 05:21 GMT, up 22 cents, or 0.3 percent, from their last close, and U.S. WTI crude futures were up 19 cents, or 0.3 percent, at $68.84 a barrel. As we now sit under the $80 level, we can reflect on this week. Two contradicting factors this morning: refinery throughput in China, the world’s second-largest oil importer, rose to a record high of 12.49 million barrels per day (bpd) in September as some independent plants restarted operations after prolonged shutdowns over summer to shore up inventories. And on the other hand, undermining the strong refinery data, China did on Friday report its weakest economic growth since 2009 in the third quarter, with gross domestic product expanding by only 6.5 percent, missing estimates. Something makes me think that this will be an up kind of day. We've been sitting neutrally for a while and it's time for a new move. Good day.

Fuel Oil Market (Oct 18)

The front crack opened at -8.35, strengthening to -8.05, before weakening to -8.45. The Cal 19 was valued at -13.75.

Cash premiums for cargoes of Asia's mainstay 380 cSt highsulphur fuel oil slipped on Thursday, falling away from a more than two-month high in the previous session amid lower deal values in the Singapore trading window.

Industry sources however said sentiment was still supported by the relatively tight availability of near-term supplies in Singapore which are weighed down by limited arbitrage flows into the city-state this month.

Singapore fuel oil inventories slipped to a two-week low in the week to Oct. 17, as net imports of the fuel shrank to a four-week low.

Onshore fuel oil inventories fell 5 percent, or 946,000 barrels (about 141,000 tonnes), to 17.707 million barrels, or 2.643 million tonnes.

Economic data/events (Times are UK)

* 3pm: U.S. Existing Home Sales, Sept.

* 6pm: Baker Hughes rig count

* ~6:30pm: ICE weekly commitments of traders report for Brent, gasoil

* 8:30pm: CFTC weekly commitments of traders report on various U.S. futures and options contracts

Singapore 380 cSt

Nov18 - 483.25 / 485.25

Dec18 - 476.25 / 478.25

Jan19 - 469.50 / 471.50

Feb19 - 463.00 / 465.00

Mar19 - 457.50 / 459.50

Apr19 - 452.25 / 454.25

Q1-19 - 463.25 / 465.25

Q2-19 - 447.50 / 449.50

Q3-19 - 427.75 / 430.25

Q4-19 - 394.25 / 396.75

CAL19 - 439.00 / 442.00

CAL20 - 369.75 / 375.75

Singapore 180 cSt

Nov18 - 490.75 / 492.75

Dec18 - 485.00 / 487.00

Jan19 - 479.75 / 481.75

Feb19 - 474.00 / 476.00

Mar19 - 468.75 / 470.75

Apr19 - 463.50 / 465.50

Q1-19 - 474.00 / 476.00

Q2-19 - 459.75 / 461.75

Q3-19 - 442.50 / 445.00

Q4-19 - 416.00 / 418.50

CAL19 - 453.00 / 456.00

CAL20 - 393.25 / 399.25

Rotterdam 3.5%

Nov18 - 452.00 / 454.00

Dec18 - 445.75 / 447.75

Jan19 - 441.25 / 443.25

Feb19 - 437.00 / 439.00

Mar19 - 432.75 / 434.75

Apr19 - 428.50 / 430.50

Q1-19 - 437.00 / 439.00

Q2-19 - 424.00 / 426.00

Q3-19 - 402.25 / 404.75

Q4-19 - 368.75 / 371.25

CAL19 - 413.00 / 416.00

CAL20 - 349.50 / 355.50

BP  

IBIA logo. IBIA to host ethanol marine fuel workshop in New York  

Limited-capacity session will examine ethanol’s commercial, technical and regulatory prospects as a shipping fuel.

Blue Whale NxtGen Energy battery system. Corvus Energy’s Blue Whale NxtGen battery system gains DNV type approval  

DNV approval confirms the safety and performance of Corvus Energy’s large-scale battery system for ferries, cruise ships and offshore vessels.

Jessie Ng, PMG Energies. PMG Energies appoints Jessie Ng as bunker trader in Singapore  

Bunker firm adds experienced trader to Singapore team.

Hapag-Lloyd vessel Seaspan Amazon during a bunkering operation. Hapag-Lloyd completes simultaneous-operations biomethanol bunkering in Busan  

Container line bunkers ISCC EU-certified biomethanol from Goldwind during SIMOPS, advancing its 2024 supply agreement.

Launching ceremony of Baraka-9. Pinnacle Marine launches B100-compatible harbour craft Baraka-9 for Trans Wave  

Singapore shipbuilder adds another biodiesel-ready vessel to a fleet renewal programme aimed at harbour craft decarbonisation.

Rune G. Kongstein, Glander International Bunkering. Glander International Bunkering creates European commercial director role, appoints Rune Kongstein  

Marine fuels firm is aligning its European operations under a single commercial leadership structure.

VPS logo. VPS to run marine fuel management course in the Netherlands this November  

Two-day training programme covers fuel quality, handling and decarbonisation regulations.

International Chamber of Shipping (ICS) logo. Wind-assisted propulsion 'no longer just a concept', ICS panel says  

Shipowners weigh wind power as a practical, low-risk route towards decarbonisation targets.

Hoegh Starlight vessel connected to shore power. Höegh Autoliners vessel connects to shore power for the first time in Europe  

Höegh Starlight used 11 kV shore power in Zeebrugge, allowing it to switch off its auxiliary engines while alongside.

ROC logo. Chinese shipbuilder ROC signs deal for up to eight methanol-ready CSOVs  

Contract signed with European shipowner for vessels designed for offshore wind farm maintenance work.