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Tue 16 Jan 2018 09:23

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent hit $70.37 a barrel on Monday, a December 2014 high - when markets were at the beginning of a three year-long slump. U.S. WTI crude futures were at $64.47 a barrel, up $17 cents, or 0.3 percent from their last settlement, after WTI hit a December-2014 peak of $64.89 a barrel in early trading. Well, who'd have thunk it; look at the headlines this morning: 'Oil prices up at 3 year highs, as market supported by healthy demand'. Well, yeeeessss, in any historical look at demand it looks pretty healthy. It's like my food intake across the day; it looks a pretty healthy amount, around the levels of the last few years, BUT, and that is a big butt, exercise needs to be taken into account. What's the point in just focusing on demand and not supply. Not to worry, the very accurate projections from banks are here to back it up. Merrill Lynch: 'We now see a deficit of 430,000 bpd in 2018 compared to 100,000 prior'; Morgan Stanley: 'oil markets were 0.5 million bpd undersupplied in 2017'. Well, l'm sure you can talk up the numbers to show anything. It's like modern art: "What do you see?" "I see the artist's attempt to illicit the feeling of sorrow and the bottom corner makes me see into the tormented soul of the artist, really understanding their feelings when creating this piece". NO, I see randomly arranged colours on a canvas. The banks are like a used car salesman: they have a vested interest in it going up, up to the hilt they are. So of course they aren't going to talk it down. "Well, it's an okay car, not really worth the money, once you get to about 40 mph, it drags to the left, which is pretty dangerous, actually." Technically, we are due a corrective phase, so don't be too surprised if we get a drop back in prices, before a renewal of the bullish sentiment.

Fuel Oil Market (January 15)

The front crack opened at -11.15, weakening to -11.55 across the day. The Cal 19 was valued at -11.90.

Cash premiums for Asia's 380 cSt high-sulphur fuel oil cargoes climbed to their highest since Jan. 3 amid elevated deal value on Monday, trade sources said.

In the break bulk ex-wharf market, stiff competition weighed on 380 cSt fuel oil ex-wharf premiums as suppliers sought to attract buyers ahead of the lull period during the Chinese new year holidays next month, source said.

ST Shipping, Glencore's shipping arm, has chartered the Almi Sun suezmax tanker to load up to 130,000 tonnes of fuel oil from the Middle East Gulf around Jan. 18 for discharge into Asia, according to ship broker reports and ship tracking data in Reuters Eikon.

Economic Data and Events

* EIA releases monthly Drilling Productivity Report

* Sandefjord oil conference, with speakers including Statoil CEO Eldar Saetre and Norway Petroleum and Energy Minister Terje Soviknes, 1st day of 2

* China National Petroleum Corp. releases annual oil and gas report

* Argus Americas Crude Summit, Houston, with executives from Trafigura, Reliance Industries, Motiva Enterprises, among others, 1st day of 3

* Angola, Nigerian loading programs for March

Singapore 380 cSt

Feb18 - 378.00 / 380.00

Mar18 - 378.50 / 380.50

Apr18 - 378.75 / 380.75

May18 - 378.75 / 380.75

Jun18 - 378.25 / 380.25

Jul18 - 377.75 / 379.75

Q2-18 - 378.50 / 380.50

Q3-18 - 376.75 / 378.75

Q4-18 - 372.75 / 375.25

Q1-19 - 365.00 / 367.50

CAL19 - 346.50 / 349.50

CAL20 - 292.00 / 297.00

Singapore 180 cSt

Feb18 - 382.50 / 384.50

Mar18 - 383.50 / 385.50

Apr18 - 383.75 / 385.75

May18 - 384.00 / 386.00

Jun18 - 383.50 / 385.50

Jul18 - 383.25 / 385.25

Q2-18 - 383.75 / 385.75

Q3-18 - 382.25 / 384.25

Q4-18 - 378.75 / 381.25

Q1-19 - 372.75 / 375.25

CAL19 - 355.00 / 358.00

CAL20 - 301.00 / 306.00

Rotterdam Barges

Feb18 365.75 / 367.75

Mar18 366.75 / 368.75

Apr18 367.25 / 369.25

May18 367.00 / 369.00

Jun18 366.50 / 368.50

Jul18 365.25 / 367.25

Q2-18 366.75 / 368.75

Q3-18 363.25 / 365.25

Q4-18 355.00 / 357.50

Q1-19 347.00 / 349.50

CAL19 326.00 / 329.00

CAL20 272.00 / 277.00


Nikolas Giannos, Malik Supply. Malik hires bunker trader for Athens office  

Danish supplier adds Nikolas Giannos to its Hellas operation.

Armorine supply truck. Greenergy completes acquisition of fuel and lube distributor Armorine  

UK firm expands into France following competition clearance to purchase established supplier.

A Maersk vessel, pictured from above. Maersk retrofits 200 time-chartered vessels to cut fuel costs and emissions  

Shipping giant partners with 50 owners on efficiency programme targeting 35% emissions reduction.

Singapore Port viewed from The Pinnacle@Duxton. MPA declines to renew Brightoil bunker craft operator licence  

Brightoil Petroleum will cease operations from November 1 following licence expiry.

Panama flags. Sonan Bunkers launches Panama office to expand Americas coverage  

Supplier opens hub in Panama City under new Sonan Energy branding.

The Everllence B&W ME-GI engine. Everllence marks 10 years of ME-GI dual-fuel engine with over 1,000 orders  

Company claims methane-fuelled engine has become industry standard with over 500 units at sea.

MoU signing - ABB, Everllence and OceanWings. MoU signed to develop wind-assisted propulsion for LNGCs  

Three companies sign MoU to develop hybrid propulsion concept combining wingsails with variable-speed engines.

Anemoi Rotor Sails on U-Ming's Grand Pioneer. U-Ming becomes first Taiwanese shipowner to install rotor sails  

Grand Pioneer VLOC fitted with four Anemoi rotor sails at COSCO Zhoushan shipyard.

AIP Handover Ceremony for the Methanol Superstorage tank design. ClassNK and Panama approve methanol tank design that almost doubles capacity  

SRC's Methanol Superstorage technology uses a sandwich plate system to increase shipboard fuel storage by 85%.

The Everllence B&W ME-GI engine. Everllence secures propulsion package order for five 8,400 TEU boxships  

Asian shipbuilder orders complete dual-fuel engine systems for newbuild container vessel series.


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