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 prices surged for the first day of the week.  The July WTI contract closed at $104.41/bbl, up +$1.75 and Brent settled at $109.99/bbl, up +$1.38. Market rose on stronger recent US economic data while the ECB continues to reduce interest rate and pumping “free money” into the system. The G8 met for the first time as G7 as Russia is excluded from the session due to its conflict with Ukraine over Crimea. The Iran nuclear negotiation has hit some challenges, further delaying expectations of seeing strong Iranian oil exports back soon into the market. Chinese inflation accelerated in May to the fastest pace in four months on food costs to 2.5%, lower than the official target of 3.5% which leaves some room for further stimulus policies if needed. In terms of data from the US, market will be looking at April Wholesale Inventories and the API Oil stocks later today where another draw is expected in Crude. This morning, crude prices are trading higher for WTI and lower for Brent.

Fueloil Specifics

The Northwest European bunker fuel oil prices started the week on the higher side. Delivered 380cst product both in Antwerp and Rotterdam was assessed nearly $5/mt higher versus previous close. Suppliers reported relatively low activity in the market due a holiday across major NWE ports. The Singapore fuel oil prices started the week lower, down by more than $2.0 during the Platts window yesterday. Market remained firm while a higher incoming estimate for July may have started to ease. The 380cst physical cargo market flipped to discount on aggressive offers. The delivered bunker premiums were ranging between $3.0 and $5.0 above cargo prices yesterday. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Jul Aug Sep Q414 Q115 Q215 NYMEX WTI Swap (1st month) 1,75 104,41 ↑ 103,42 102,37 101,27 99,23 96,55 94,40 ICE Brent Swap (1st month) 1,38 109,99 ↓ 108,66 108,01 107,49 106,57 105,18 104,37 ICE Gasoil Swap (1st month) 8,25 892,25 ↓ 893,83 896,42 897,17 895,39 - - 3.5% Barges FOB Rtdm 4,50 577,50 ↑ 577,75 575,50 573,25 569,50 568,25 564,50 3.5% Cargoes FOB Med 3,00 570,50 ↑ 574,25 572,75 571,75 566,75 564,75 572,50 1.0% Cargoes FOB NWE 2,25 631,25 ↑ 617,50 614,50 609,25 598,25 588,75 585,25 3% no. 6 USGC WB 0,37 90,43 ↑ 91,05 90,05 89,75 88,92 88,55 87,90 380 CST Cargoes FOB S'pore (3,75) 593,00 ↑ 597,75 595,50 593,75 592,00 590,75 587,50 0.1 % GO Barges FOB Rtdm 9,50 891,75 ↓ 894,25 897,25 898,25 898,25 - - Physical Rotterdam 380 CST 5,00 579,75 ↑ 583,00 580,75 578,50 574,75 573,50 569,75 Physical Singapore 380 CST (3,50) 599,25 ↑ 603,00 600,75 599,00 597,25 596,00 592,75

Focus of the day: ARA

Yet again low demand in a well supplied market. The forward curve remains stable at flattish/backwardated. Still good numbers out there compared to paper for the high sulphur. The low sulphur came off about 12 dollars over the last week, but still remains at a high 50 dollar premium. Caution is advised, buy early. No changes really regarding the gasoil supply. Discounts and premiums for lower density have risen just a touch. Notification periods for the different grades; four days for high sulphur enquiries and five working days for low sulphur enquiries; two days for gasoil enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Medium 10-Jun 10:00 AM Apr 0.2% 1.1% - Intial Claims Medium 12-Jun 8:30 PM 07-jun 320K 312K - Continuing Claims Medium 12-Jun 8:30 AM 07-jun 2625K 2603K - Retail Sales High 12-Jun 8:30 AM May 1.3% 0.7% - Core PPI High 13-Jun 8:30 AM May 0.2% 0.5% - Michigan Sentiment Medium 13-Jun 9:55AM Jun 82.5 82.9 -

Source: OW Risk Management