Wed 17 Oct 2018 09:00

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.


Image: Freight Investor Services (FIS)
Commentary

The API reported a surprise draw of 2.13 million barrels of U.S. crude oil inventories for the week ending October 12, compared to analyst expectations that this week would see a build in crude oil inventories of 2.167 million barrels. This contradicted an analysts poll as well as a Reuters poll that put the expected figure at a smallish build in stocks. It explains the algo trade at 9.30pm UK time last night when the data was released, as well as the positive territory trading that we are seeing this morning. I'm sure the bulls in the market feel as warm and fuzzy as everyone watching the video of Prince Harry getting a hug from the child on his tour of New Zealand and Australia. Equities up, markets up, stocks down, Iran production down. I'm sure there's many a person ordering the champagne for the Christmas party as they sit on their new long positions, hoping a $100/barrel will pay for the presents for all of the step children. However, it's expected that supply shortages will become less acute and we will see a weakening of spreads. With these higher prices, it seems that Iran isn't too concerned about the cuts to their exports, as higher prices mean that income from oil sales hasn't had the impact probably intended by the Trump administration. Checkmate!. What would have really annoyed Iran and help the U.S. would be a government investment in U.S. oil infrastructure, releasing oil reserves, exemptions on oil exports for Iran, pushing OPEC to increase supply, and Trump will be on top of a cheaper gasoline market for his voters, destruction of a large part of the Middle East's income, as well as Russia, force producers to supply more to keep up with current incomes. Then, when it comes to the 2020 reelection, he'll look like a hero; and then, just before, he can put sanctions back on again. I wonder if he reads this report... maybe we should tweet it. Good day.

Fuel Oil Market (Oct 16)

The front crack opened at -9.05, strengthening to -8.95, before weakening to -9.10. The Cal 19 was valued at -14.00

The front-month 380 cSt barge fuel oil crack on Tuesday widened its discount to Brent crude from a two-month high in the previous session but was still considered by market participants to be trading at strong levels relative to crude.

The crack discount was trading at about minus $8.94 a barrel to Brent crude on Tuesday, down from minus $8.36 a barrel in the previous session; its narrowest discount since Aug. 15.

This came despite weaker oil prices on Tuesday which fell on evidence of higher U.S. oil production and increasing U.S. crude inventories. But reports of a fall in Iranian oil exports helped limit losses.

Economic data/events (Times are UK)

* 12pm: MBA Mortgage Applications, Oct. 12

* 1:30pm : U.S. Housing Starts, Sept.

* 3:30pm: EIA weekly U.S. oil inventory report; Top Live blog starts 3:20 pm

* 7pm: Fed Meeting Minutes

* Argus Global Crude conference, 2nd day of 3

** Speakers: Trafigura Co-Head of Oil Trading Ben Luckock, Repsol Chief Economist Pedro Merino Garcia, BB Energy Global Head of Crude Trading Alessandro Liberati, OMV Supply Trading Head Vladimir Langhamer

* Genscape weekly ARA crude stockpiles report

* EARNINGS: Reliance Industries, Kinder Morgan

Singapore 380 cSt

Nov18 - 488.00 / 490.00

Dec18 - 481.75 / 483.75

Jan19 - 475.50 / 477.50

Feb19 - 469.50 / 471.50

Mar19 - 464.75 / 466.75

Apr19 - 460.00 / 462.00

Q1-19 - 469.75 / 471.75

Q2-19 - 454.75 / 456.75

Q3-19 - 435.00 / 437.50

Q4-19 - 400.00 / 402.50

CAL19 - 440.75 / 443.75

CAL20 - 371.25 / 377.25

Singapore 180 cSt

Nov18 - 495.25 / 497.25

Dec18 - 490.25 / 492.25

Jan19 - 485.50 / 487.50

Feb19 - 479.25 / 481.25

Mar19 - 474.75 / 476.75

Apr19 - 470.25 / 472.25

Q1-19 - 480.00 / 482.00

Q2-19 - 465.75 / 467.75

Q3-19 - 449.00 / 451.50

Q4-19 - 421.25 / 423.75

CAL19 - 454.50 / 457.50

CAL20 - 388.00 / 394.00

Rotterdam 3.5%

Nov18 - 456.25 / 458.25

Dec18 - 450.75 / 452.75

Jan19 - 446.75 / 448.75

Feb19 - 443.00 / 445.00

Mar19 - 439.25 / 441.25

Apr19 - 435.25 / 437.25

Q1-19 - 443.00 / 445.00

Q2-19 - 431.25 / 433.25

Q3-19 - 409.50 / 412.00

Q4-19 - 371.50 / 374.00

CAL19 - 415.50 / 418.50

CAL20 - 350.50 / 356.50


The Buffalo 404 barge, owned by Buffalo Marine Service Inc., performing a bunker delivery. TFG Marine installs first ISO-certified mass flow meter on US Gulf bunker barge  

Installation marks expansion of company's digitalisation programme across global fleet.

Sogestran's fuel supply vessel, the Anatife, at the port of Belle-Île-en-Mer. Sogestran's HVO-powered tanker achieves 78% CO2 reduction on French island fuel runs  

Small tanker Anatife saves fuel while supplying Belle-Île and Île d'Yeu.

Crowley 1,400 TEU LNG-powered containership, Tiscapa. Crowley deploys LNG-powered boxship Tiscapa for Caribbean and Central American routes  

Vessel is the third in company's Avance Class fleet to enter service.

The inland LNG bunker vessel LNG London. LNG London completes 1,000 bunkering operations in Rotterdam and Antwerp  

Delivery vessel reaches milestone after five years of operations across ARA hub.

The M.V. COSCO Shipping Yangpu, China's first methanol dual-fuel containership. COSCO vessel completes maiden green methanol bunkering at Yangpu  

China's first methanol dual-fuel containership refuels with green methanol derived from urban waste.

Carsten Ladekjær, CEO of Glander International Bunkering. Glander International Bunkering reports stable performance amid regulatory changes  

Bunker trader achieves $3bn turnover and $22m pre-tax earnings for fiscal 2024-25.

Map of the Mediterranean Sea ULSFO demand surges in Med as ECA compliance drives fuel shift  

KPI OceanConnect reports accelerating ULSFO uptake across the region.

The Zale performing a bunker delivery. Monjasa reports Singapore as top bunker supply port with over 1 MMT delivered  

Supplier says world's largest bunkering hub became its biggest supply location in 2024.

Steel cutting ceremony for the 7,999 DWT chemical bunker tanker Lucia Cosulich at Taizhou Maple Leaf Shipbuilding Co., Ltd. in China. Fratelli Cosulich begins construction of second methanol-ready bunker tanker  

Italian firm starts steel cutting for 7,999 DWT chemical bunker vessel.

Petrobras logo. Petrobras introduces volume-based price discounts at Santos  

Brazilian oil company offers progressive discounts for bunker deliveries exceeding 1,500 tonnes.


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