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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


Brazil flag. Petrobras extends marine fuel advance sales period to 20 days  

Brazilian firm extends booking window for bunker purchases from 15 to 20 days.

Stream Marine Training logo. Stream Marine Training calls for fuel-specific safety standards  

Maritime training provider says generic alternative fuel guidelines are insufficient for crew safety.

Burando Energies appoints new board of directors. Burando Energies appoints new board to drive energy transition growth  

Rotterdam-based energy company forms four-member leadership team, including new CEO Ruben Blok.

Baleària’s fully electric intercontinental ferry. AYK Energy secures contract for world's first fully electric intercontinental ferries  

Battery provider to power Baleària's zero-emission ferries between Spain and Morocco.

Nacho de Miguel – Head of Alternative Fuels & Sustainability. Peninsula executive to speak at Americas LNG Summit panel on bunkering trends  

Nacho de Miguel will discuss global LNG bunkering developments at October conference in Louisiana.

Gasum’s LNG bunkering vessel Coralius. Gasum seeks sales manager for maritime LNG and LBG operations in Hamburg  

Nordic energy company recruits for German office to expand sustainable marine fuel business.

SEA-LNG highlights emissions reductions in LNG-powered shipping. SEA-LNG claims LNG emissions cuts ahead of IMO meeting  

Coalition says methane slip reductions and biomethane growth support decarbonisation pathway.

IPCO Power’s FID Improver. Goltens and IPCO Power partner on fuel system optimisation solutions  

Partnership combines homogenisation technology with global engineering services to help shipowners achieve efficiency gains.

Demonstration vessel REIMEI. Japanese consortium achieves 98% methane slip reduction in LNG vessel trials  

Mitsui O.S.K. Lines, Kanadevia, and Yanmar exceed target in onboard demonstration.

De Wit Bunkering obtains ISCC certification. De Wit Bunkering secures ISCC certification under RED III directive  

Dutch bunker supplier obtains renewable energy certification for traceable, sustainable fuel supply chain operations.


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