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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
Decab Hub and MMMCZCS logos. Lloyd’s Register and Maersk Mc-Kinney Møller Center launch ammonia safety and training resources for shipping  

New tools aim to help operators build the safety management and competency frameworks needed for ammonia-fuelled vessels.
Kevin Dohmen, IBT Bunkering & Trading. IBT Bunkering & Trading appoints Kevin Döhmen to manage new Singapore office  

Döhmen tasked with developing IBT’s operation in the Asian city-state.
Peak Skarv 3 vessel. Peak takes delivery of third S-class vessel and cuts steel for ammonia-fuelled ship  

Norwegian operator marks two events at Chinese yard as ammonia-powered newbuild programme advances.
Launching ceremony of Minerva Helen. New Times Shipbuilding launches LNG dual-fuel tanker for Minerva  

112,500-dwt Minerva Helen launched at shipyard in Jiangsu, China.
Hansa Drejoe vessel. Leonhardt & Blumberg equips first of four newbuilds with Econowind VentoFoils  

German shipowner installs wind-assisted propulsion technology aboard general cargo vessel Hansa Drejoe.
Green Pearl vessel at Port of Civitavecchia. Axpo and Vitol launch LNG bunkering at the Port of Civitavecchia  

Operation marks the extension of Axpo’s LNG bunkering network to third major Italian port.
Grande Pacifico vessel. Grimaldi takes delivery of ammonia-ready Grande Pacifico  

9,800-ceu ship is the largest PCTC in the Neapolitan Group’s fleet and the first of five sister vessels on order.
Regional seminar on alternative fuels and new technologies. IMO seminar in Trinidad and Tobago trains Caribbean maritime educators for the alternative fuels era  

A five-day regional seminar in Port of Spain addressed ammonia, methanol and hydrogen training for seafarers.
Summit Arbutus vessel. Corvus Energy wins 40 MWh battery contract for BC Ferries’ new biofuel-compatible Summit Class vessels  

Norwegian battery supplier to power four new hybrid-electric ferries for Canada’s BC Ferries.
Fleetzero Leviathan Battery Energy Storage System (BESS). ABS issues product design assessment for Fleetzero’s Leviathan battery system  

The first US-manufactured lithium iron phosphate marine battery system receives classification society approval.

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