Oil and fuel oil hedging market update

Brent closed down $0.02 last night to $63.84 and WTI closed at $58.11, down $0.84. So, it looks like the rally on Brent has stalled somewhat prior to the OPEC meeting on Thursday. It's annoying really as I'm not quite sure what "surprise" the market expects. I'm pretty convinced it has already priced in an extension of the cuts out to end 2018, so anything less than this will be a disappointment and potentially catastrophic for flat price. It's a bit like when you're at home and you hear a low flying helicopter flying outside your house. You rush to the window, "Quick love, get the kids!". Everyone peeks out of the window at the sight of a very low flying helicopter and potential Hollywood-style action. Where in fact it turns out that some idiot has stolen a loaf of bread from the local 7-11 and the fun is over when he's nabbed by the local bobby on a bike. That's what the build up to the OPEC meeting is like. All the talk seems to have shifted to beyond OPEC and the future of crude oil production. Not in the next 2,3 or 5 years but further out than that - the medium term. And the only words on peoples lips are either gas or shale production. Let me put it to you this way: the top 7 most valuable companies by market capitalization are all tech companies. Tech is the way forward no matter how much you may try to ignore it with your Nokia 3310 and weekly trips to the library. Shale oil is the future and it is being driven by innovative technology. I sense that the market in general has yielded to this reality and with it, inevitably, comes people moving away from the more traditional ways of doing things. Now don't get me wrong, I like an Artisanal bakery, a trip to a farmers market and visiting my local butcher, but at the end of the day, in today's world it is a lot easier to just go to Tesco online and press "repeat last order". Buy, sell, OPEC, repeat.

Fuel Oil Market (November 27)

The front crack opened at -8.70, strengthened to -8.55, before weakening to -8.60. The Cal 18 was valued at -7.90.

Asian fuel oil refining margins on Monday snapped five straight sessions of losses after expectations of ample near-term supplies of the industrial fuel dampened sentiment

Asia's 180 cSt fuel oil crack to Brent crude cents narrowed its discount by 14 cents a barrel to -$5.12 a barrel. On Friday, the front-month crack sank to a seven-month low of -$5.26 a barrel.

Meanwhile, improved buying interest for spot physical cargoes of 380 cSt fuel oil helped lift cash premiums of the fuel away from a near two-week low it reached on Friday.

A total of 1.28 million tonnes of fuel oil have traded in the window in November so far, against 1.56 million tonnes in October.

Economic Data/Events: (UK times)

* 1:30pm: U.S. Advance Goods Trade Balance, Oct.

* 1:30pm: U.S. Wholesale Inventories, Oct. (prelim)

* 1:30pm: U.S. Retail Inventories (Oct.)

* 2pm: U.S. FHFA House Price Index (Sept.)

* 2:45pm: Senate Banking, Housing and Urban Affairs Cmte hearing on nomination of Jerome Powell to be Fed chair

* 3pm: U.S. Conf. Board Consumer Confidence (Nov.)

* 3pm: U.S. Richmond Fed. Manf Index (Nov.)

* 9:30pm: API issues weekly U.S. oil inventory report

Singapore 380 cSt

Dec17 - 362.00 / 364.00

Jan18 - 361.25 / 363.25

Feb18 - 360.00 / 362.00

Mar18 - 359.25 / 361.25

Apr18 - 358.00 / 360.00

May18 - 357.00 / 359.00

Q1-18 - 360.00 / 362.00

Q2-18 - 357.00 / 359.00

Q3-18 - 351.75 / 354.25

Q4-18 - 346.25 / 348.75

CAL18 - 355.75 / 358.75

CAL19 - 321.25 / 326.25

Singapore 180 cSt

Dec17 - 366.00 / 368.00

Jan18 - 365.50 / 367.50

Feb18 - 365.00 / 367.00

Mar18 -364.50 / 366.50

Apr18 - 363.75 / 365.75

May18 - 363.00 / 365.00

Q1-18 - 365.00 / 367.00

Q2-18 - 362.75 / 364.75

Q3-18 - 357.75 / 360.25

Q4-18 -352.50 / 355.00

CAL18 - 362.00 / 365.00

CAL19 - 330.00 / 335.00

Rotterdam 380 cSt

Dec17 343.75 / 345.75

Jan18 344.00 / 346.00

Feb18 344.00 / 346.00

Mar18 343.75 / 345.75

Apr18 343.00 / 345.00

May18 342.25 / 344.25< br>
Q1-18 343.75 / 345.75

Q2-18 3342.25 / 344.25

Q3-18 337.75 / 340.25

Q4-18 3329.25 / 331.75

CAL18 339.75 / 342.75

CAL19 301.25 / 306.25


		Sea-LNG welcomes EU transport plan's recognition of methane decarbonisation pathway Industry coalition says STIP validates investments in LNG, bio-methane, and e-methane for shipping.

		TasPorts and H2U Group sign MoU to explore green ammonia production at Bell Bay Feasibility study to assess 500,000 tonne per year green ammonia facility in northern Tasmania.

		JERA Nex bp commissions hydrogen refuelling station at Port of Ostend Facility will initially serve Windcat's Hydrocat 48 as part of EU-funded demonstration project.

		Anglo-Eastern launches methanol bunkering simulator with Wärtsilä for seafarer training Ship manager introduces simulator and courses to train crew in safe handling of methanol fuel.

		ATH Trading adds bunker tanker to Angola fleet Commodity trader deploys M/T ATH Catamba in Luanda for offshore marine fuel supply operations.

		Danish Shipping calls for EU to invest ETS revenues in green marine fuel production Industry body welcomes Commission's sustainable transport plan but urges concrete action on funding.

		Transport & Environment welcomes STIP but warns action needed by 2026 to secure e-fuels leadership EU transport plan takes steps to boost green fuel production for ships and planes.

		DNV claims nuclear propulsion could offer viable route to maritime decarbonisation Classification society publishes white paper examining technological, regulatory, and commercial challenges facing nuclear-powered merchant vessels.

		European nuclear declaration signed for maritime decarbonisation Over 30 companies sign cooperation agreement to advance small modular reactor technologies for shipping.

		Peninsula operates Omega barge for fuel supply in Belgian North Sea Victrol vessel said to be the only estuary barge of its size serving Belgian North Sea ports.

Oil and fuel oil hedging market update

By the Oil Desk at Freight Investor Services.

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