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  

Bermuda Container Line (BCL) logo. Bermuda Container Line imposes emergency bunker surcharge citing Iran War fuel price spike  

Shipping operator to add $150 per TEU charge from 1 May amid geopolitical fuel cost pressures.

China flag. Zhejiang’s first methanol-powered container ship launches in Jiaxing  

Vessel uses methanol propulsion technology to reduce carbon dioxide emissions by 90%.

TES flag with a model vessel in the background. TES joins SEA-LNG coalition to advance e-methane as marine fuel  

Green energy company targets 1m tonnes annual e-methane production by 2030 for shipping decarbonisation.

Ethanol and methanol workshop graphic. IBIA to host workshop on ethanol and methanol marine fuels during Singapore Maritime Week  

Half-day event will examine alcohol-based fuel pathways and integration into shipping’s multi-fuel landscape.

Steel-cutting ceremony for 13,000-dwt vessel. ROC begins construction of second chemical tanker for Essberger  

Chinese shipbuilder holds steel-cutting ceremony for 13,000-dwt methanol-ready vessel with ice class capability.

Norsepower and CHIC sign agreement. Norsepower and Cosco Shipping Heavy Industry Equipment sign wind propulsion cooperation agreement  

Wind propulsion technology provider partners with Chinese shipyard to scale rotor sail production.

Wärtsilä logo. Shipping firms struggle to prioritise decarbonisation investments amid regulatory uncertainty, Wärtsilä survey finds  

Survey of 225 maritime executives reveals 70% say uncertainty hinders investment decisions despite regulatory pressure.

IMT Isca G-Flex vessel render. Longitude Engineering unveils IMT Isca G-Flex PSV design with alternative fuel capability  

Naval architecture firm launches adaptable platform support vessel design based on the IMT-984 G-Class hull.

Philippos Ioulianou, EmissionLink. Shore power infrastructure is key to cutting ferry emissions in European cities, says EmissionLink  

Port electrification is needed to enable vessels to switch off engines at berth, reducing urban pollution.

Maritime and Port Authority of Singapore logo. Singapore prioritises maritime resilience amid geopolitical uncertainty, eyes digitalisation and green fuels  

MPA chief outlines the sector’s adaptation to supply chain disruptions while advancing automation and alternative fuels.