Thu 30 Nov 2017, 08:50 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Brent closed down $0.50 last night to $63.11 and WTI closed down $0.69 to $57.30. The 30th of November. 26 days until Christmas. 32 days until we see the start of a New Year. But we all know why everyone is so excited today, don't we? That's right, tomorrow marks the start of Christmas cracker joke season! I'm so excited I don't know what to do with myself. Oh and apparently there is a meeting going on in Vienna concerning oil. I wonder though, what will OPEC bring? Christmas cheer or Christmas fear? Well I think probably a bit of both. We all know OPEC loves leaving an ace card up their sleeve; they will never give everything away, so even if the news isn't particularly what everyone is hoping for, then there will still be that level of ambiguity leaving people guessing and scratching their heads. The only people who will be truly thankful - huddled around a TV in a bar - will be the US producers. I can see them later, red-faced from too much bourbon, slapping each other on the back. Then the moment comes when OPEC are going to announce and CABOOM! It's like that bit at the end of the film The Truman Show. You're just willing him to open that door; and when he does, everyone goes nuts. But what's through the door? Look, it doesn't really matter; whatever the announcement later, it is only going to be positive for the price of oil and the real winners will be the US producers. They're already at 9.8mn bpd of production and it's going to 10 before the end of the year. An extension of the cuts means flat price stays higher, profits grow, further investment in technology - resulting in lower production cuts. I think the US producers will be ordering two turkeys this year - unless, of course, OPEC don't extend the cuts as long as people think. Then what will happen? Hold your hats. Good day.

Fuel Oil Market (November 29)

The front crack opened at -9.10, strengthening to -8.80, before weakening to -8.85, ending -8.80. The Cal 18 was valued at -8.15.

A lack of buying interest for physical cargoes of high-sulphur fuel oil weighed on cash differentials of Asia's 180 cSt and 380 cSt fuel oil grades.

Some industry participants said buyers of fuel oil cargoes might be holding back in anticipation of falling prices following the OPEC/non-OPEC meeting on Nov. 30.

Oil prices fell on Wednesday on doubts OPEC and Russia will agree on extending a crude production cut to cover all of 2018, and after a report of an unexpected rise in U.S. crude oil inventories.

Fujairah fuel oil inventories rose 13%, or 1.267 million barrels (about 189,000 tonnes), from a week ago to a nine-week high of 10.908 million barrels (1.63 million tonnes) in the week ended Nov. 27.

Economic Data/Events: (UK times)

* 8am: Singapore onshore oil-product stockpile data

* 8:30am: Top Live OPEC Blog

* 1:30pm: U.S. Initial Jobless Claims, Nov. 25

* 1:30pm: U.S. Continuing Claims, Nov. 18

* 1:30pm: U.S. Personal Income, Oct.

* 2:45pm: Bloomberg Consumer Comfort, Nov. 26

* 2:45pm: Chicago Purchasing Manager, Nov.

Singapore 380 cSt

Dec17 - 360.25 / 362.25

Jan18 - 359.00 / 361.00

Feb18 - 358.25 / 360.25

Mar18 - 357.75 / 359.75

Apr18 - 356.75 / 358.75

May18 - 355.50 / 357.50

Q1-18 - 358.25 / 360.25

Q2-18 - 356.25 / 358.25

Q3-18 - 351.25 / 353.75

Q4-18 - 346.00 / 348.50

CAL18 - 351.75 / 354.75

CAL19 - 317.25 / 322.25

Singapore 180 cSt

Dec17 - 364.25 / 366.25

Jan18 - 363.25 / 365.25

Feb18 - 363.00 / 365.00

Mar18 - 362.75 / 364.75

Apr18 - 362.25 / 364.25

May18 - 361.25 / 363.25

Q1-18 - 363.00 / 365.00

Q2-18 - 361.75 / 363.75

Q3-18 - 357.25 / 359.75

Q4-18 - 352.25 / 354.75

CAL18 - 358.00 / 361.00

CAL19 - 326.00 / 331.00

Rotterdam 380 cSt

Dec17 342.25 / 344.25

Jan18 342.50 / 344.50

Feb18 342.25 / 344.25

Mar18 342.00 / 344.00

Apr18 341.25 / 343.25

May18 340.25 / 342.25

Q1-18 342.25 / 344.25

Q2-18 340.75 / 342.75

Q3-18 336.00 / 338.50

Q4-18 327.75 / 330.25

CAL18 335.75 / 338.75

CAL19 296.75 / 301.75

BP  

United LNG I bunker vessel alongside Blue Aspire vessel. Titan charters 8,000-cbm LNG bunker vessel for ZARA region operations  

United LNG I to deliver LNG and bio-LNG across Amsterdam, Rotterdam, Antwerp and Zeebrugge ports.

Flag of Mauritania. Peninsula begins physical bunker supply operations in Mauritania  

Marine fuel supplier operating two barges following licence award from the Mauritanian National Hydrocarbons Commission.

X-Press Cassiopeia vessel. PuriFire Energy signs biomethanol supply deal with X-Press Feeders  

Letter of intent covers up to 15,000 tonnes annually for feeder carrier’s fleet.

Alan Yang and Yujin Kang, Flex Commodities. FLEX Commodities opens Seoul office with new Korea leadership team  

Dubai-based trader establishes South Korea presence with appointments of Alan Yang and Yujin Kang.

Eng. Sulaiman Ali Al Hadhrami, O Bunkering. O Bunkering appoints Sulaiman Alhadhrami as chief executive officer  

Omani bunker supplier names new CEO to lead growth and expansion in the maritime sector.

Shore power system. Zhoushan expands shore power infrastructure as part of emissions reduction drive  

Chinese port city reports 30% increase in shore power usage across terminals and berths.

Hamburg Express vessel. Hapag-Lloyd and Kuehne+Nagel partner on biofuel initiative for Asia-Europe trade  

Agreement covers 3,300-teu using waste-based biofuels, targeting a 2,979-tonne CO₂e reduction in 2026.

Rendering of a tug vessel. Berg Propulsion to supply electric propulsion systems for India’s green tugs  

Swedish firm to provide thrusters and electrical integration for two 60-tonne bollard pull battery-electric vessels.

Singapore skyline with Merlion and central business district. World Fuel seeks marine fuel supply executive in Singapore  

Role to manage supplier relationships and source marine fuel across South-East Asia and Australia-New Zealand.

OOCL Wisdom naming ceremony. OOCL names first methanol dual-fuel vessel  

Orient Overseas Container Line christens OOCL Wisdom, dubbed the world’s largest methanol dual-fuel container vessel.