Tue 20 Mar 2018, 08:54 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed down $0.16 to $66.05, WTI closed at $62.06 down $0.28. It is now time for me to bombard you with facts: U.S. crude oil exports in 2017 were nearly double those of 2016, and China accounted for 202,000 b/d (20 percent) of the 527,000 b/d total increase. U.S. crude was shipped to 37 destinations, compared with 27 in 2016. India, which did not receive U.S. crude oil exports in 2016, received 22,000 b/d in 2017, tying with Spain as the 10th-largest destination. U.S. crude oil exports grew to an average of 1.1 million barrels per day (b/d) in 2017. U.S. crude oil production reached 9.3 million b/d in 2017. Current US production is around 10.38mn b/d. And finally, Spot Brent crude oil prices averaged $3.36 per barrel more than WTI prices in 2017 compared with just $0.40/b more in 2016, providing a price incentive to export U.S. crude oil into the international market. Phew - I rest my case. But geopolitics is the fly in the ointment that has led to the collapse of my case in a more spectacular fashion than OJ Simpson. Have a good day.

Fuel Oil Market (March 19)

The front crack opened at -10.60, weakening to -10.85, before strengthening to -10.55, closing -10.85. The Cal 19 was valued at -14.55

Asia's 380 cSt cash differential slid into a wide discount on Monday amid an absence of willing buyers despite aggressive suppliers for cargoes of the fuel.

380 cSt fuel oil cash discounts fell to minus $1.17 a tonne to Singapore quotes on Monday, down from a premium of 5 cents on Friday and plus 17 cents a week ago.

The 380 cSt cash differential is now at its lowest since March 2017

Economic Data and Events

* 8:30pm: API issues weekly U.S. oil inventory report

* Bloomberg-compiled refinery snapshot for U.S. and Canada; gives offline capacity projections for crude units and FCCs

* Saudi Crown Prince Mohammed bin Salman meets with President Donald Trump at the White House as part of U.S. visit

Singapore 380 cSt

Apr18 - 361.75 / 363.75

May18 - 361.50 / 363.50

Jun18 - 359.00 / 361.00

Jul18 - 359.50 / 361.50

Aug18 - 358.00 / 360.00

Sep18 - 356.00 / 358.00

Q2-18 - 361.25 / 363.25

Q3-18 - 357.75 / 359.75

Q4-18 - 351.25 / 353.75

Q1-19 - 343.00 / 345.50

CAL19 - 316.50 / 320.50

CAL20 - 253.50 / 261.50

Singapore 180 cSt

Apr18 - 369.00 / 371.00

May18 - 368.75 / 370.75

Jun18 - 368.50 / 370.50

Jul18 - 367.50 / 369.50

Aug18 - 366.25 / 368.25

Sep18 - 364.25 / 366.25

Q2-18 - 368.75 / 370.75

Q3-18 - 365.25 / 367.25

Q4-18 - 359.25 / 361.75

Q1-19 - 351.50 / 354.00

CAL19 - 329.75 / 333.75

CAL20 - 277.50 / 285.50

Rotterdam Barges

Apr18 349.75 / 351.75

May18 349.50 / 351.50

Jun18 348.50 / 350.50

Jul18 347.00 / 349.00

Aug18 345.25 / 347.25

Sep18 342.75 / 344.75

Q2-18 349.25 / 351.25

Q3-18 345.00 / 347.00

Q4-18 335.75 / 338.25

Q1-19 328.00 / 330.50

CAL19 297.00 / 301.00

CAL20 242.00 / 250.00


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.