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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
Nicolaj Kofoed, Blue Energy Partners. Blue Energy Partners appoints Nicolaj Kofoed as group treasurer  

Bunker firm strengthens treasury function as banking relationships and funding needs grow.
Bunker Partner logo. Bunker Partner seeks trainee lawyer for Athens office  

Role offering the opportunity to a law graduate to gain practical experience in maritime law.
Type approval test (TAT) for H22CDF-GA engine. HD Hyundai gains type approval for low-pressure ammonia dual-fuel engine  

HHI-EMD completes type approval testing for its H22CDF-GA engine, expanding its ammonia engine portfolio to two fuel-supply technologies.
Moataz Abdelrahman, Flex Commodities. Flex Commodities appoints Moataz Abdelrahman as senior marine fuels trader  

Dubai-based trading firm adds senior trader to expand marine fuels and bunker trading activities across the Middle East.
Container vessel manoeuvring in port. Alternative-fuel ship orders outpace port infrastructure, LR report finds  

Lloyd's Register study shows methanol and ammonia bunkering infrastructure lagging behind newbuild orders for alternative-fuel vessels.
UEC60LSJ ammonia-fuelled engine render. J-ENG secures orders for four ammonia-fuelled engines under Japanese PCTC project  

Vessels form part of plan to build four ammonia-fuelled car carriers, a dedicated bunkering vessel and supply chain.
Hanwha Power receives ABS AiP for battery-powered containership design. ABS grants AIP to Hanwha Power for 1,700-TEU battery-powered container ship  

Design uses roughly 151 MWh of swappable battery storage for fully electric propulsion on a container vessel.
Peter Krahenbuhl, WinGD. WinGD signs first licence deal with HD Hyundai Marine Engine to expand Korean production  

Mid-bore engine portfolio gains new production route into Korea's bulk carrier and tanker newbuild markets.
ONE Symphony naming ceremony. Ocean Network Express names ammonia- and methanol-ready newbuild ONE Symphony  

Vessel features conventional diesel main engine, with concept designs approved for possible future conversion to methanol or ammonia.
Sing Fuels logo. Sing Fuels seeks Asia-based supply trader to bolster bunker procurement team  

Singapore bunkering firm is recruiting a supply trader to manage marine fuel purchasing across Asia.

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