Oil and fuel oil hedging market update

Commentary

Brent closed last night down $0.36 to $63.16 and WTI closed at $56.76, up $0.02. It's getting to that great time of year over in Dubai. This week they have the air show, the motor show, the Race to Dubai golf and next week we have the Grand Prix in Abu Dhabi. But all that is on everyone's mind is not watching Lewis Hamilton parade around Yas Marina. No, no, no. Everyone is waiting for the OPEC meeting in Vienna at the end of November. To be honest, I don't know why they don't just hold the OPEC meeting in the Viceroy Yas Island next Sunday, because I'm pretty sure every OPEC minister would be there anyway. That would be great, wouldn't it? Instead of those pit workers holding up how many laps have gone they could hold up signs that say "Cuts are extended", or whatever they decide. Bring OPEC to the masses! It's inevitable that those who drove the market up regardless of the fundamentals will be the ones who take profits and sell it off at some point, but will they really do it before the OPEC meeting? If they extend the cut and we fly up again, they are going to have a lot of egg on their face. Or will they deliberately sell it off beforehand, to then buy it up again on the bullish headlines coming from panicking OPEC ministers at the meeting? I'm inclined to go with the latter scenario - the bullish play of OPEC has already been evidenced with yesterday OPEC once again increasing its demand forecast. Wasn't it only last week that they conceded that demand actually won't be that high? API data out later tonight so watch crude with caution.

Fuel Oil Market (November 13)

The front crack opened at -7.80, strengthening to -7.75, before weakening to -8.00. The Cal 18 was valued at -7.75.

Cash premiums of Asia's 380 cSt high-sulphur fuel oil edged higher on Monday, snapping four straight sessions of declines as deal values in the Singapore window improved, sources said

Meanwhile, in the paper markets, activity was muted at the start of the week, leaving the prompt-month time spreads, arbitrage spreads and fuel oil cracks largely unchanged. Singapore's marine fuel sales fell to a fourmonth low of 4.005 mil tns in October, down 7.7% from September, but were largely unchanged compared with the same period a year ago.

The October quantities are the third-lowest volumes for 2017 ahead of the June and February volumes. In October 2016, a total of 4.009 million tonnes of bunker fuels were sold in Singapore.

Economic Data/Events: (UK times)

* 9am: IEA's monthly oil market report

* 9:30am: Oct. U.K. Consumer Price Index m/m est. 0.2% (prior 0.3%) and y/y est. 3.1% (prior 3%)

* 11am: U.S. NFIB Small Business Optimism. Oct.

* 1:30pm: U.S. PPI Final Demand, Oct.

* Today:

** API issues weekly U.S. oil inventory report

** Bloomberg-compiled refinery snapshot, looking at key outages at refineries in the U.S. and Canada, and providing offline capacity projections for crude units and FCCs

Singapore 380 cSt

Dec17 - 366.50 / 368.50

Jan18 - 365.25 / 367.25

Feb18 - 363.75 / 365.75

Mar18 - 362.25 / 364.25

Apr18 - 360.75 / 362.75

May18 - 359.25 / 361.25

Q1-18 - 363.75 / 365.75

Q2-18 - 359.25 / 361.25

Q3-18 - 353.75 / 356.25

Q4-18 -348.50 / 351.00

CAL18 - 359.00 / 362.00

CAL19 - 321.50 / 326.50

Singapore 180 cSt

Dec17 - 370.75 / 372.75

Jan18 - 370.25 / 372.25

Feb18 - 369.25 / 371.25

Mar18 - 368.25 / 370.25

Apr18 - 367.00 / 369.00

May18 - 366.00 / 368.00

Q1-18 - 369.25 / 371.25

Q2-18 - 365.50 / 367.50

Q3-18 - 360.50 / 363.00

Q4-18 - 355.25 / 357.75

CAL18 - 365.25 / 368.25

CAL19 - 330.25 / 335.25

Rotterdam 380 cSt

Dec17 347.75 / 349.75

Jan18 346.75 / 348.75

Feb18 346.00 / 348.00

Mar18 345.25 / 347.25

Apr18 344.25 / 346.25

May18 343.25 / 345.25

Q1-18 346.00 / 348.00

Q2-18 343.25 / 345.25

Q3-18 337.75 / 340.25

Q4-18 329.25 / 331.75

CAL18 341.25 / 344.25

CAL19 299.25 / 304.25


		NYK to offset ship emissions with CDR credits from Loblolly project Japanese shipping group turns to biomass-based carbon sequestration to address residual maritime emissions.

		K Line orders four LNG dual-fuel car carriers for European short-sea operations Kawasaki Kisen Kaisha contracts quartet of 1,380-vehicle vessels at China Merchants Jinling Shipyard.

		Bunge seeks bunker purchaser for Rotterdam operation Agribusiness is looking for candidates with experience in marine fuel procurement.

		First vessel in NYK Stolt Tankers’ newbuild series launched in China FKAB-designed 38,000 DWT chemical tanker launched at Nantong Xiangyu Shipyard, China.

		Damen expands biofuel-compatible Combi Freighter series with CF 6000 and CF 7000 designs Damen Shipyards Group adds two larger variants to its Combi Freighter series, offering up to 40% more cargo capacity.

		K Shipbuilding, bound4blue and Bureau Veritas launch joint project for wind-assisted LR1 tanker The three partners are collaborating on a 74,000-dwt LR1 tanker design incorporating wind-assisted propulsion.

		Hapag-Lloyd and Seaspan complete first methanol retrofit under five-ship programme The Seaspan Yangtze has been converted to dual-fuel methanol operation as part of a $120m programme.

		MPA and MSC sign MoU covering decarbonisation, digitalisation and talent development in Singapore The agreement marks 30 years of MSC’s presence in Singapore and covers alternative fuels adoption.

		Lloyd’s Register backs nuclear car carrier concept with Korean partners at Posidonia 2026 LR and Korean partners receive approval in principle for SMR-powered pure car and truck carrier concept.

		Lloyd’s Register expands Korean shipyard partnerships at Posidonia 2026 A series of agreements covering alternative fuels and emerging technologies was announced at the Athens exhibition.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

Recommended