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Tue 12 Jun 2018, 09:06 GMT

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
Factory Acceptance Testing (FAT) for X52DF-A-1.0 engine. WinGD completes factory testing of ammonia-fuelled engine for LPG carrier  

X52DF-A-1.0 engine tested in China ahead of installation on first of four vessels under construction.
Drift Energy energy-harvesting ship render. RINA awards first approval in principle for energy-harvesting ship  

Drift Energy receives certification for vessel design that generates clean energy at sea.
MSC World Europa vessel. MSC Cruises achieves flag state recognition for verified methane emissions data  

Bureau Veritas certifies actual methane slip values for two LNG-fuelled cruise ships.
IBIA and EENMA MoU signing. IBIA and Greek shortsea shipowners sign cooperation agreement  

The International Bunker Industry Association partners with EENMA to support the marine fuels sector.
Hapag-Lloyd and Scan Global Logistics logos. Scan Global Logistics and Hapag-Lloyd expand biofuel partnership to cut shipping emissions  

Collaboration claims to avoid 8,500 tonnes of CO₂e emissions through second-generation biofuels.
Lapis Ace ship-to-ship LNG bunkering operation. MOL signs first annual LNG bunkering contract for car carriers in Vancouver  

Japanese shipping company secures year-round fuel supply with Seaspan Energy at Canadian port.
Gasum's LNG bunkering vessel Coralius. Gasum’s maritime bio-LNG sales surge from 0.8% to 12.3% in 2025  

Nordic energy company attributes growth to FuelEU Maritime regulation introduced in 2025.
Port Authority of Valencia board meeting. Valenciaport gives LNG bunkering go-ahead to Shell and Axpo Iberia  

Port authority approves two LNG bunkering authorisations as part of its decarbonisation strategy.
Northern Purpose naming ceremony. BSM enters LCO₂ carrier segment with management of dual-fuel Northern Purpose  

Bernhard Schulte Shipmanagement takes over first liquefied carbon dioxide carrier for Northern Lights project.
Anna Cosulich vessel. Fratelli Cosulich takes delivery of methanol-ready bunker tanker Anna Cosulich  

Vessel built in China will head to Singapore to support group's bunkering operations.

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