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Tue 12 Jun 2018 09:06

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.

Commentary

Brent closed last night at $76.46 with no change from Friday, and WTI closed at $66.10 up $0.36. Let's face it, it seems like OPEC's policy will more than likely change come 22nd June. 18 months of hard graft and - quite frankly - astounding compliance by all members has done its job and flat price is up at the dizzying heights of $76 per bbl. Something I'm not sure even the biggest of bulls would have envisaged. However, this compliance to the cuts has manifested itself into allowing other people into markets they previously weren't in - US oil heading to Asia for example - so the time has come for something to be done.

Fuel Oil Market (June 11)

The Crack ranged from -10.05 to -9.65 in a volatile day on the crack market with it closing at around - 9.80. Arbitrage spread rebounds from one-week low - The front-month East-West arbitrage spread today rebounded from a one-week low in the previous session as firm Middle East demand for fuel oil continued to eat into arbitrage supplies into Singapore, trade sources said. The 380 cSt fuel oil July arbitrage spread settled at $16 a tonne on Monday, up from a week low of $15.50 a tonne in the Friday. Meanwhile, weaker crude oil prices lent some support to the July 180 cSt fuel oil crack on Monday, which narrowed its discount to Brent crude by 14 cents a barrel from Friday to minus $5.66 a barrel.

Economic data/events (Times are London.)

* 1:30pm: U.S. CPI m/m for May

* 5pm: EIA's monthly Short-Term Crude Outlook report

* Trump meets Kim Jong Un, Singapore

* OPEC's monthly oil market report, including supply/demand forecasts and estimates

* Bloomberg-compiled Refinery Snapshot for U.S. and Canada; gives offline capacity projections for crude units and FCCs

* API issues weekly U.S. oil inventory report
Steve Esau, Sea-LNG. Sea-LNG welcomes EU transport plan's recognition of methane decarbonisation pathway  

Industry coalition says STIP validates investments in LNG, bio-methane, and e-methane for shipping.
Port of Bell Bay and Bell Bay Industrial Precinct. TasPorts and H2U Group sign MoU to explore green ammonia production at Bell Bay  

Feasibility study to assess 500,000 tonne per year green ammonia facility in northern Tasmania.
Ostend Hydrogen Refuelling Station. JERA Nex bp commissions hydrogen refuelling station at Port of Ostend  

Facility will initially serve Windcat's Hydrocat 48 as part of EU-funded demonstration project.
Methanol bunkering training simulator. Anglo-Eastern launches methanol bunkering simulator with Wärtsilä for seafarer training  

Ship manager introduces simulator and courses to train crew in safe handling of methanol fuel.
ATH Catamba vessel. ATH Trading adds bunker tanker to Angola fleet  

Commodity trader deploys M/T ATH Catamba in Luanda for offshore marine fuel supply operations.
European Union member state flags. Danish Shipping calls for EU to invest ETS revenues in green marine fuel production  

Industry body welcomes Commission's sustainable transport plan but urges concrete action on funding.
Illustration of green fuel production for ships and aircraft. Transport & Environment welcomes STIP but warns action needed by 2026 to secure e-fuels leadership  

EU transport plan takes steps to boost green fuel production for ships and planes.
Graphic announcing release of DNV Maritime Nuclear Propulsion White Paper. DNV claims nuclear propulsion could offer viable route to maritime decarbonisation  

Classification society publishes white paper examining technological, regulatory, and commercial challenges facing nuclear-powered merchant vessels.
Signatories of European Nuclear Maritime Cooperation Declaration. European nuclear declaration signed for maritime decarbonisation  

Over 30 companies sign cooperation agreement to advance small modular reactor technologies for shipping.
Victrol Omega vessel. Peninsula operates Omega barge for fuel supply in Belgian North Sea  

Victrol vessel said to be the only estuary barge of its size serving Belgian North Sea ports.

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