Wed 14 Mar 2018, 09:11 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed down $0.31 last night to $64.64, WTI closed at $60.71, down 0.65. Yesterday's Brent market was very wibbly wobbly (fantastic English phrase) with a low of $64.05 and a high of $65.68 - with people quickly crying into their desk, or swearing to themselves. And it kind of makes sense. The market is about as interesting as listening to the shipping forecast on BBC Radio 4, while eating dry toast, and leafing through a text book on the intricacies of the UK tax system. With no real direction, and people taking more of a wait-and-see approach to yesterday's volatility will be welcomed with the same glee as Guardiola will have over Sevilla beating Man Utd last night. What will break us out of this range on Brent, though? Well, as I mentioned yesterday, I think the IEA report tomorrow will be important. There is also the US rig count increasing by 60 since the start of the year, US oil production at 10.369mn bpd as of last week, a near 1mn bpd increase from January where production stood at 9.492mn bpd. Consistent builds on US crude stockpiles, further complication of Venezuelan oil production, the sacking of Rex Tillerson and the implications for U.S. foreign policy (I'm looking at you Iran and North Korea). There are plenty of things to get this market going.

Fuel Oil Market (March 13)

The front crack opened at -9.95, strengthening to -9.90,before weakening to -10.10. The Cal 19 was valued at -14.85

Asia's prompt-month viscosity spread slipped, edging away from a 10-month high hit in the previous session. Tighter blendstock supplies and increased prompt demand from South Korean power producers have contributed to the recent gains in the viscosity spread.

Singapore sold a total of 4.136 million tonnes of marine fuels in February, the highest ever for the shortest month of the year. February sales were 7.5 percent higher than a year earlier but down 10.2 percent from a month ago

However, vessels calling at Singapore for bunkers continued to load larger quantities of fuel with each ship taking on average 1,340 tonnes of fuel in February, well above the average of 1,240 tonnes loaded by vessels in 2017 and slightly higher from the 1,330 tonne average in January.

Economic Data and Events

* 11am: MBA Mortgage Applications

* 11:30am-12pm: OPEC releases Monthly Oil Market Report

* 12:30pm: U.S. PPI Final Demand,. Feb.

* 12:30pm: U.S. Retail Sales Advance, Feb.

* 2pm: U.S. Business Inventories, Jan.

* 2:30pm: EIA weekly oil inventory report

Singapore 380 cSt

Apr18 - 358.25 / 360.25

May18 - 357.25 / 359.25

Jun18 - 356.25 / 358.25

Jul18 - 354.50 / 356.50

Aug18 - 352.75 / 354.75

Sep18 - 351.00 / 353

Q2-18 - 357.25 / 359.25

Q3-18 - 352.75 / 354.75

Q4-18 - 346.00 / 348.50

Q1-19 - 337.25 / 339.75

CAL19 - 312.25 / 316.25

CAL20 - 247.50 / 255.50

Singapore 180 cSt

Apr18 - 366.00 / 368.00

May18 - 365.00 / 367.00

Jun18 - 364.25 / 366.25

Jul18 - 362.75 / 364.75

Aug18 - 361.00 / 363.00

Sep18 - 359.25 / 361.25

Q2-18 - 365.00 / 367.00

Q3-18 - 360.75 / 362.75

Q4-18 - 354.50 / 357.00

Q1-19 - 346.25 / 348.75

CAL19 - 325.50 / 329.50

CAL20 - 271.50 / 279.50

Rotterdam Barges

Apr18 345.50 / 347.50

May18 344.75 / 346.75

Jun18 343.50 / 345.50

Jul18 341.75 / 343.75

Aug18 339.75 / 341.75

Sep18 337.00 / 339.00

Q2-18 344.50 / 346.50

Q3-18 339.50 / 341.50

Q4-18 330.00 / 332.50

Q1-19 322.50 / 325.00

CAL19 291.25 / 295.25

CAL20 236.25 / 244.25

BP  

Titan Optimus alongside Peony Leader vessel. Titan Clean Fuels completes first FuelEU Maritime pooling exercise with DNV verification  

Pool included several hundred vessels, with LNG and biomethane helping balance compliance deficits.

AiP handover ceremony for ammonia-fuelled Panamax bulk carrier. ClassNK grants world-first approval for ammonia-fuelled bulk carrier with Type B fuel tanks  

Japanese classification society issues AiP for Panamax design with tanks installed on exposed deck.

Philippos Ioulianou, EmissionLink. EmissionLink warns UK ETS preparations at risk amid Strait of Hormuz focus  

Maritime emissions compliance provider says regulatory deadline cannot be delayed despite geopolitical disruptions.

FortisBC Tanker truck. FortisBC completes 10,000th LNG bunkering operation for marine vessels  

Canadian utility reaches refuelling milestone as West Coast LNG marine fuel demand grows.

AiP handover ceremony for two next-generation 80m tanker designs. Bureau Veritas approves dual-fuel tanker designs for Australian coastal operations  

SeaTech Solutions receives approval in principle for 80 m vessels designed to carry methanol and biofuels.

Kawasaki Kisen Kaisha (K Line), Sumitomo Corporation and NYK Line logo. Japanese shipping firms secure government funding for Singapore ammonia bunkering trial  

Sumitomo, K Line and NYK to demonstrate ship-to-ship ammonia fuel supply operations.

Kota Ocean vessel. PIL and PSA launch Singapore’s first joint land-sea green shipping service  

DNV-verified service allows shippers to reduce Scope 3 emissions through lower-carbon fuel allocation.

Mercedes Pinto vessel. Baleària begins sea trials of dual-fuel catamaran Mercedes Pinto in Gijón  

Third LNG-powered fast ferry expected for delivery in May, destined for Canary Islands routes.

Nave Amaryllis vessel. Navios Partners takes delivery of dual-fuel-ready Aframax tanker  

Nave Amaryllis is equipped with LNG and methanol readiness alongside shore power capability.

IBIA logo. IBIA backs IMO as global shipping regulator ahead of MEPC 84  

Marine fuel industry body supports joint shipping statement emphasising multi-stakeholder approach to decarbonisation.