Oil and fuel oil hedging market update

Commentary

Brent crude futures were at $69.07 a barrel at 04:41 GMT, down from a high of $69.37 earlier in the day and $18 cents below their last close. U.S. WTI crude futures CLc1 were at $63.68 a barrel, down $5 cents from their last settlement. WTI rose to $64.89 on Tuesday, also the highest since December 2014. A nice pull back last night of over a dollar. As predicted, the market weight of long positions, as well as the dizzy heights of $70, had people cutting their positions and down we tumbled. If this oil market was a game of cards, OPEC really are the ones in the prime position, along with the plucky newcomer the U.S. not far behind. For everyone else we haven't a chance, we are currently holding an array of unmatchable cards, well in the knowledge that the big two are close to putting down a royal flush. The idea of an OPEC fade out across the year is being floated, as well as Iraq coming out to back sticking to the whole year cut plan. So many options for them to take, all the while their coffers are being filled with the higher crude prices. I'm sure end users of oil products are looking about as good as Steve Bannon after a big night out, with rising prices adding to expenses. I'm sure there will be some more of this corrective phase, as oil moves down further. But contemplate this, if you were OPEC what would you do? Most probably sit with your feet up, do nothing, and watch it rise. Beware the bulls, they are not done yet; hedge funds are at record long levels, and they are going to want to get some profit to kick off the new year.

Fuel Oil Market (January 16)

The front crack opened at -11.60, strengthening to -11.45, before moving back to -11.70. The Cal 19 was valued at -12.60.

Suppliers eager to offload fuel oil cargoes ahead of the approaching Chinese new year holidays next month attracted buying interest, lifting the volume of traded cargoes on Tuesday to their highest in over a week.

The lower supplier offers and resulting deal values narrowed cash premiums of 380 cSt fuel oil cargoes to a four-session low. Meanwhile, trading volumes in the swaps market remained relatively muted with limited trade activity in fuel oil time spreads

A Singapore court on Monday filed additional charges against nine men accused in a large-scale oil theft at Shell's biggest refinery, the latest development in an extensive investigation in the city-state.

Economic Data and Events

* 5pm: U.S. MBA Mortgage Applications, Jan. 12

* 7:15pm: U.S. Industrial Production, Dec.

** Sandefjord oil conference, final day

** Genscape weekly ARA crude stockpiles report

** API issues weekly U.S. oil inventory report, one day later than usual

** Argus Americas Crude Summit, Houston, 2nd day of 3

Singapore 380 cSt

Feb18 - 373.75 / 375.75

Mar18 - 374.25 / 376.25

Apr18 - 374.75 / 376.75

May18 - 374.75 / 376.75

Jun18 - 374.25 / 376.25

Jul18 - 373.75 / 375.75

Q2-18 - 374.50 / 376.50

Q3-18 - 372.75 / 374.75

Q4-18 - 368.75 / 371.25

Q1-19 - 362.00 / 364.50

CAL19 - 341.00 / 344.00

CAL20 - 289.50 / 294.50

Singapore 180 cSt

Feb18 - 378.25 / 380.25

Mar18 - 379.25 / 381.25

Apr18 - 379.75 / 381.75

May18 - 380.00 / 382.00

Jun18 - 379.50 / 381.50

Jul18 - 379.25 / 381.25

Q2-18 - 379.75 / 381.75

Q3-18 - 378.25 / 380.25

Q4-18 - 374.75 / 377.25

Q1-19 - 369.75 / 372.25

CAL19 - 349.75 / 352.75

CAL20 - 298.75 / 303.75

Rotterdam Barges

Feb18 361.50 / 363.50

Mar18 362.75 / 364.75

Apr18 363.25 / 365.25

May18 363.00 / 365.00

Jun18 362.50 / 364.50

Jul18 361.25 / 363.25

Q2-18 362.75 / 364.75

Q3-18 359.75 / 361.75

Q4-18 351.75 / 354.25

Q1-19 343.75 / 346.25

CAL19 320.75 / 323.75

CAL20 270.50 / 275.50


		MOL holds naming ceremony for fourth LNG dual-fuel VLCC Vessel, named Tsurugidake, features an LNG fuel tank with a capacity exceeding 10,000 cbm.

		VPS to host Bergen seminar on marine fuel quality, lubricants and decarbonisation regulation Free-to-attend event on September 16 will feature speakers from VPS and DNV.

		Cosulich Marine Energy launches third methanol-ready bunker tanker in China Carlotta Cosulich launched at Taizhou Maple Leaf Shipyard, leaving one vessel in series still to come.

		Carnival's CSMART seeks specialist instructor for LNG-as-fuel training in Netherlands Role focused on delivering training to through classroom instruction and simulator-based learning.

		Stabilis Solutions nears 100 LNG bunkering operations at Galveston Houston-based supplier highlights its Gulf Coast LNG bunkering record as plans advance for new liquefaction facility.

		Towngas hosts Hong Kong government delegation at Inner Mongolia green methanol plant Hong Kong's Transport and Logistics Bureau tours VENEX facility as green methanol capacity scales to 300,000 tonnes.

		Singapore 12-month bunker calls hit all-time high in July TTM calls at world's largest bunkering hub reach record levels despite softer sales volumes.

		Singapore T3M bunker sales stay below 14m tonnes for fourth month running Rolling three-month volumes remain subdued despite modest month-on-month recovery in July.

		Peru’s Port of Callao launches first shore power system in Latin America DP World Callao’s onshore power supply system could cut over 6,300 tonnes of CO₂ annually.

		New Times Shipbuilding delivers LNG dual-fuel crude oil tanker to Capital Chinese yard hands over 155,500-dwt vessel in ceremony attended by owner’s representative.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

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