Mon 9 Jul 2018, 09:48 GMT

Oil and fuel oil hedging market update


By the Oil Desk at Freight Investor Services.



Commentary

Brent closed Friday down $0.28 to $77.11 and WTI closed up $0.86 to $73.80. At the moment all eyes are on Cushing, and the fact that the Canadian crude outage has perhaps skewed the outlook on storage levels there. The front 2 WTI spreads certainly evidence a tightness in supply, but normal service will, apparently, resume at the end of July. Keep your eye on this. Also, keep your eye on Beryl. No, not your mate's mad Aunt Beryl, but Hurricane Beryl in The Caribbean. Actually, keep your eye on hurricane season with the same beady eyes as Jordan Pickford as the mere hint of the USGC oil system going down is more than likely going to yield in prices spiking upwards towards $85. Eeeek. In other news, the trade spat between China and the USA seems to have largely been priced in, but Brexit rumblings carry on in the same embarrassing way as they have done for two years. Good day.

Fuel Oil Market (Jul 6)

The front crack opened at -9.60, strengthening to -9.25,before weakening to -9.35. The Cal 19 was valued at -15.05

Asia's fuel oil market edged up on Friday with the 380 cSt Aug/Sept time spread and the front-month 380 cSt barge crack to Brent crude trading higher.

Weaker crude oil prices on Friday contributed to the narrowing fuel oil discount to Brent crude, they said. For the week, the fuel oil market ended lower, retreating from the multi-year highs seen in the previous week

Some trade sources said that last week's multi-year highs in cash premiums and front-month time spreads were unreasonable and that a correction was inevitable.

Economic data/events (Times are London.)

* Azeri BTC loading program for August

* 8:30pm: CFTC weekly commitments of traders report (pushed back from Friday due to U.S. holiday)

* Bloomberg proprietary forecast of Cushing crude inventory change; plus weekly analyst survey of crude, gasoline, distillate inventories before Wednesday’s EIA weekly inventory report

* What to Watch in Commodities: Trade War, Crude, El Nino, Miners

Singapore 380 cSt

Aug18 - 450.00 / 452.00

Sep18 - 444.00 / 446.00

Oct18 - 439.50 / 441.50

Nov18 - 436.00 / 438.00

Dec18 - 433.00 / 435.00

Jan19 - 429.50 / 431.50

Q4-18 - 436.00 / 438.00

Q1-19 - 426.00 / 428.00

Q2-19 - 414.50 / 417.00

Q3-19 - 387.50 / 390.00

CAL19 - 393.00 / 396.00

CAL20 - 314.50 / 320.50

Singapore 180 cSt

Aug18 - 459.00 / 461.00

Sep18 - 453.50 / 455.50

Oct18 - 449.75 / 451.75

Nov18 - 446.50 / 448.50

Dec18 - 443.75 / 445.75

Jan19 - 441.00 / 443.00

Q4-18 - 446.50 / 448.50

Q1-19 - 437.75 / 439.75

Q2-19 - 427.50 / 430.00

Q3-19 - 404.50 / 407.00

CAL19 - 408.00 / 411.00

CAL20 - 337.50 / 343.50

Rotterdam 3.5%

Aug18 - 431.00 / 433.00

Sep18 - 426.00 / 428.00

Oct18 - 421.50 / 423.50

Nov18 - 417.50 / 419.50

Dec18 - 413.75 / 415.75

Jan19 - 411.50 / 413.50

Q4-18 - 417.50 / 419.50

Q1-19 - 407.25 / 409.25

Q2-19 - 394.50 / 397.00

Q3-19 - 363.50 / 366.00

CAL19 - 371.25 / 374.25

CAL20 - 297.50 / 303.50


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.