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


		Blue Energy Partners appoints Nicolaj Kofoed as group treasurer Bunker firm strengthens treasury function as banking relationships and funding needs grow.

		Bunker Partner seeks trainee lawyer for Athens office Role offering the opportunity to a law graduate to gain practical experience in maritime law.

		HD Hyundai gains type approval for low-pressure ammonia dual-fuel engine HHI-EMD completes type approval testing for its H22CDF-GA engine, expanding its ammonia engine portfolio to two fuel-supply technologies.

		Flex Commodities appoints Moataz Abdelrahman as senior marine fuels trader Dubai-based trading firm adds senior trader to expand marine fuels and bunker trading activities across the Middle East.

		Alternative-fuel ship orders outpace port infrastructure, LR report finds Lloyd's Register study shows methanol and ammonia bunkering infrastructure lagging behind newbuild orders for alternative-fuel vessels.

		J-ENG secures orders for four ammonia-fuelled engines under Japanese PCTC project Vessels form part of plan to build four ammonia-fuelled car carriers, a dedicated bunkering vessel and supply chain.

		ABS grants AIP to Hanwha Power for 1,700-TEU battery-powered container ship Design uses roughly 151 MWh of swappable battery storage for fully electric propulsion on a container vessel.

		WinGD signs first licence deal with HD Hyundai Marine Engine to expand Korean production Mid-bore engine portfolio gains new production route into Korea's bulk carrier and tanker newbuild markets.

		Ocean Network Express names ammonia- and methanol-ready newbuild ONE Symphony Vessel features conventional diesel main engine, with concept designs approved for possible future conversion to methanol or ammonia.

		Sing Fuels seeks Asia-based supply trader to bolster bunker procurement team Singapore bunkering firm is recruiting a supply trader to manage marine fuel purchasing across Asia.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

Recommended