A bunker fuel and oil report, detailing the day per day trading patterns and prices in the market.The report is prepared from OW Risk Management and covers all major bunker fuel oil markets around the world, including all major ports, ranging from Singapore to Rotterdam.

Market in Brief

Crude price ended higher yesterday. WTI rose $0.19 to close at $97.38/bbl, while Brent +$0.47 to settle at $106.25/bbl. US crude stocks saw a much smaller-than-expected build this week, Crude was up +0.4 mb (expectations +2.3mb), but was in line with API statistics the prior day. The build in gasoline stocks also were below expectations at +0.5 mb  vs +0.9mb, while the draw in Distillates exceeded expectations at -2.4 mb vs -2.1mb. WTI crude oil prices have been outperforming Brent in recent weeks, rising from $92/bbl in mid-January to over $97/bbl currently. Much of the strength can be attributed to the highly anticipated start of the Keystone Gulf Coast pipeline from Cushing down to the Gulf Coast. WTI prices could cross $100/bbl in coming weeks as the Keystone Gulf line leads to more Cushing draws. However, most market participants do not expect the strength to last. US crude oil market will increasingly be saturated, led by refining, storage and transportation bottlenecks particularly in the Gulf Coast.  Asian markets are calmer but the overall mood is cautious as the market awaits policy updates out of Europe today as well as tomorrow’s US job report. Today both WTI and Brent are trading in positive territory (+0,37%) and (+0,20%) respectively.

Fueloil Specifics

The Northwest European bunker fuel oil market reported mixed demand and price fluctuations yesterday. Delivered 380cst product in Rotterdam and Antwerp closed the day only with marginal changes. On the other hand, LSFO products were quoted with higher premiums due to tight avails. The cash premium of 380-cst fuel oil dropped to its lowest in almost a week as more supply arrives in Singapore. A survey of data from shipping and trade sources showed at least 1.25 million tonnes of fuel oil slated for arrival over February 20-28, versus 1.09 million tonnes over February 1-19. Delivered bunker 380cst in Singapore where heard ranging between 605.00/mt – 610.00/mt and Ex-wharf 380cst closed unchanged from Tuesday 615.00/mt. Overall sentiment within FO paper looks to continue this week soft versus crude numbers and with expectation in the physical market to be less tight next coming weeks ahead. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Mar Apr May Q214 Q314 Q414 NYMEX WTI Swap (1st month) 0,19 97,38 ↑ 96,91 96,09 95,22 95,21 92,62 90,66 ICE Brent Swap (1st month) 0,47 106,25 ↑ 105,83 105,46 105,46 105,09 103,76 102,48 ICE Gasoil Swap (1st month) 3,25 899,00 ↑ 901,08 897,83 894,75 895,67 892,00 886,86 3.5% Barges FOB Rtdm 1,75 565,50 ↑ 569,75 569,25 568,75 568,75 567,00 563,25 3.5% Cargoes FOB Med 0,50 570,00 ↑ 568,25 567,00 566,50 566,50 564,50 560,50 1.0% Cargoes FOB NWE 4,00 599,50 ↑ 595,75 594,25 593,00 593,25 590,75 583,75 3% no. 6 USGC WB 0,65 88,45 ↑ 89,20 89,40 89,50 89,14 88,77 88,81 380 CST Cargoes FOB S'pore (1,50) 602,50 ↑ 593,50 590,75 590,25 590,25 588,00 585,75 0.1 % GO Barges FOB Rtdm (6,75) 897,50 ↑ 902,25 899,25 896,25 896,25 891,25 886,25 Physical Rotterdam 380 CST 0,00 566,75 ↑ 575,00 574,50 574,00 574,00 572,25 568,50 Physical Singapore 380 CST (1,00) 616,50 ↑ 598,75 596,00 595,50 595,50 593,25 591,00

Focus of the day: Houston

While Brent Crude’s Premium to WTI narrowed as concerns over sluggish market will outpace global growth demand and U.S. prices fluctuated by cold weather conditions; the spread in the Gulf Coast Bunker Prices was the widest seen in the last 8 months, OW data showed Wednesday. The spread between 380 HSFO fuel and 380 LSFO has been below $100/mt since last June, when major suppliers in the Gulf Coast depressed the LSFO prices putting the spread at $60/mt. However, due to tightness of product and less competition in the area, the HSFO and LSFO spread between Houston and New Orleans ended the day with a $118 difference as HSFO were being offered at $587 in Houston and LSFO at $705 in New Orleans by a medium well-known physical supplier in both locations. Heating Oil Resid 3% was assessed by Platts $0.65/bbl higher at $88.70 compared to the day before as overall oil markets rose in light of the US government report showing that stockpiles of distillate fuel dropped for a fourth week because of cold weather in the world’s biggest oil-consuming country.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual ISM Index High 3-Feb 10:00 AM Jan 57.0 56.5 51.3 Factory Orders Medium 4-Feb 10:00 AM Dec -2.0% 1.8% -1.5% ADP Employment Change Medium 5-Feb 8:15 AM Jan 175K 238K 175K ISM Services Medium 5-Feb 10:00 AM Jan 53.5 53.8 54.0 Initial Claims Medium 6-Feb 8:30 AM 01-feb 330K 348K - Trade Balance Medium 6-Feb 8:30 AM Dec -$37.0B -$34.3B - Nonfarm Payrolls High 7-Feb 8:30 AM Jan 150K 74K - Unemployment Rate High 7-Feb 8:30 AM Jan 6.5% 6.7% -

Source: OW Risk Management