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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
Anne Mai Hatlem and Prof Lynn Loo. GCMD and Equinor sign five-year partnership on alternative fuels and carbon storage  

Singapore-based centre and Norwegian energy company to combine expertise in maritime pilots and low-carbon fuel supply.
Petrobras logo. Petrobras suspends bunker deliveries at Rio Grande after tropical storm  

Storm damage and power outage leave resumption timeline unclear.
Grande Egitto vessel. Grimaldi adds fourteenth ammonia-ready car carrier to fleet  

Grande Egitto, built by China Merchants Heavy Industries Jiangsu, will operate on the Asia–East Africa trade route.
ABS awards AiP to HD HHI and HD KSOE for ammonia bunkering vessel design. ABS grants design approval for ammonia bunkering vessel from HD HHI and HD KSOE  

Approval in principle covers a 22,000-cbm multi-purpose vessel intended to supply ammonia as marine fuel.
Trenching vessel render. Jan De Nul exercises option for alternative-fuel-capable trenching vessel  

Belgian marine contractor confirms option for a second subsea trenching vessel built on Ulstein's customised design platform.
ABS issues NTQ approval to MODEC and Eld Energy. ABS grants technology qualification approval for FPSO fuel cell system  

MODEC and Eld Energy’s solid oxide fuel cell system moves towards offshore trials after clearing initial ABS review stages.
IMO CCC 12th Session. IMO sub-committee finalises revised methanol fuel safety guidelines  

CCC 12 completes revision of interim methanol fuel guidelines while advancing work on carbon capture and low-flashpoint fuel rules.
Volare Shipping logo. Trafigura spins off VLCC fleet into new listed shipping company  

Volare Shipping established, with eight ammonia-ready vessels on order.
Ship-to-ship ammonia bunkering operation. Japan completes world's first ship-to-ship ammonia bunkering to ammonia-fuelled vessel  

Ammonia fuel transferred between ships at Ariake Shipyard ahead of gas carrier’s sea trials.
Lilac Cove vessel. Jiangnan delivers second LPG dual-fuel VLAC in series to Singapore’s EPS  

Lilac Cove, the world’s largest liquid ammonia carrier, joins Ivy Cove as Jiangnan advances its six-ship VLAC programme.

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