Tue 14 Nov 2017 09:18

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



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


Lease agreement between Inter Terminals Sweden and the Port of Gothenburg, signed on July 1st. Pictured: Göran Eriksson, CEO of the Port of Gothenburg (left) and Johan Zettergren, Managing Director of Inter Terminals Sweden (right). New Gothenburg lease an opportunity to expand green portfolio: Inter Terminals  

Bunker terminal operator eyes tank conversion and construction projects for renewable products.

Map of US Gulf. Peninsula extends US Gulf operation offshore  

Supplier to focus on Galveston Offshore Lightering Area (GOLA) in strategy to serve growing client base.

The M/T Jutlandia Swan, operated by Uni-Tankers. Uni-Tankers vessel gets wind-assisted propulsion  

Fourth tanker sails with VentoFoil units as manufacturer says suction wing technology is gaining traction.

Port of Gothenburg Energy Port. Swedish biomethane bunkered in Gothenburg  

Test delivery performed by St1 and St1 Biokraft, who aim to become large-scale suppliers.

Image from Cockett Marine Oil presentation. Cockett to be closed down after 45 years  

End of an era as shareholders make decision based on 'non-core nature' of Cockett's business.

Petrobras logo. Petrobras confirms prompt availability of VLS B24 at Rio Grande  

Lead time for barge deliveries currently five days.

Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.

Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.

Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.

Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.


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