Wed 17 Jan 2018 09:41

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



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


The Buffalo 404 barge, owned by Buffalo Marine Service Inc., performing a bunker delivery. TFG Marine installs first ISO-certified mass flow meter on US Gulf bunker barge  

Installation marks expansion of company's digitalisation programme across global fleet.

Sogestran's fuel supply vessel, the Anatife, at the port of Belle-Île-en-Mer. Sogestran's HVO-powered tanker achieves 78% CO2 reduction on French island fuel runs  

Small tanker Anatife saves fuel while supplying Belle-Île and Île d'Yeu.

Crowley 1,400 TEU LNG-powered containership, Tiscapa. Crowley deploys LNG-powered boxship Tiscapa for Caribbean and Central American routes  

Vessel is the third in company's Avance Class fleet to enter service.

The inland LNG bunker vessel LNG London. LNG London completes 1,000 bunkering operations in Rotterdam and Antwerp  

Delivery vessel reaches milestone after five years of operations across ARA hub.

The M.V. COSCO Shipping Yangpu, China's first methanol dual-fuel containership. COSCO vessel completes maiden green methanol bunkering at Yangpu  

China's first methanol dual-fuel containership refuels with green methanol derived from urban waste.

Carsten Ladekjær, CEO of Glander International Bunkering. Glander International Bunkering reports stable performance amid regulatory changes  

Bunker trader achieves $3bn turnover and $22m pre-tax earnings for fiscal 2024-25.

Map of the Mediterranean Sea ULSFO demand surges in Med as ECA compliance drives fuel shift  

KPI OceanConnect reports accelerating ULSFO uptake across the region.

The Zale performing a bunker delivery. Monjasa reports Singapore as top bunker supply port with over 1 MMT delivered  

Supplier says world's largest bunkering hub became its biggest supply location in 2024.

Steel cutting ceremony for the 7,999 DWT chemical bunker tanker Lucia Cosulich at Taizhou Maple Leaf Shipbuilding Co., Ltd. in China. Fratelli Cosulich begins construction of second methanol-ready bunker tanker  

Italian firm starts steel cutting for 7,999 DWT chemical bunker vessel.

Petrobras logo. Petrobras introduces volume-based price discounts at Santos  

Brazilian oil company offers progressive discounts for bunker deliveries exceeding 1,500 tonnes.


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