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

Yesterday the August Brent contract went off the board comfortably above the $109 level. Technically Brent ultimately has failed on the continuation chart to sustain levels above its 200 day MA, with September now prompt and trading in backwardation a $1 below where August was. The technical picture remains uncertain, and no decisive technical break has been done so far. Figures from API yesterday showed that US crude stockpiles fell by 2.6 million barrels last week while products showed equivalent built for Gasoline and +3,8 Mios bbl for Distillates. Key events tonight will be the EIA DOE Weekly Stats - expectations are for crude to draw close to 2 million barrels- and the Fed’s Bernanke who delivers his semi-annual policy report to the House Financial Services committee. In addition to the weekly petroleum statistics, price impetus during the next couple of sessions will be provided by the Fed Chairman’s comments before the House and Senate. We don’t expect any changes from Bernanke’s Q&A of last week and, as a result another round of new equity highs is possible. This morning crude is trading down.

Fueloil Specifics

The Northwest European bunker fuel oil prices remained largely unchanged yesterday. Rotterdam port reported low demand and good product avails. Hamburg port reported tight lsfo product avails while 380cst product was assessed app.$3/mt down from previous days close. In Singapore, demand on the delivered front remained soft for most sellers, as was the case on the ex-wharf front. The ex-wharf 380cst bunker grade was assessed at $602/mt up $2/mt from Monday. The ex-wharf 500cst bunker fuel was assessed at $593.50/mt, up $4/mt. In the South Korean market bunker fuel prices have been soft for quite some time due to thin demand and the competition between the four Korean refineries remain fierce. The Singapore bunker differential – the price spread between delivered marine fuel prices and HSFO cargo values – gained $0.20/mt to $5.25/mt discount to 380-CST quotes. This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Aug Sep Oct Q413 Q114 2014 NYMEX WTI Swap (1st month) 0,37 106,00 ↓ 104,47 103,16 101,76 100,49 97,36 94,57 ICE Brent Swap (1st month) 0,28 108,14 ↓ 107,04 106,41 105,87 105,36 103,67 101,12 ICE Gasoil Swap (1st month) 0,25 919,75 ↓ 915,00 914,17 911,75 908,25 897,69 880,56 3.5% Barges FOB Rtdm (1,00) 596,00 ↓ 591,50 587,25 586,00 584,00 582,75 574,75 3.5% Cargoes FOB Med 0,25 594,00 ↓ 585,25 581,75 579,25 577,50 575,50 570,25 1.0% Cargoes FOB NWE (1,00) 596,75 ↓ 606,50 610,50 612,50 611,50 610,75 600,50 3% no. 6 USGC WB (0,26) 91,51 ↓ 91,90 91,90 91,40 91,85 91,15 90,40 380 CST Cargoes FOB S'pore 2,50 599,25 ↓ 603,25 605,50 606,50 607,50 604,75 599,00 0.1 % GO Barges FOB Rtdm 4,50 922,25 ↓ 916,25 915,25 913,25 909,25 899,25 882,25 Physical Rotterdam 380 CST 0,00 603,00 ↓ 596,75 592,50 590,25 588,75 587,00 579,00 Physical Singapore 380 CST 2,00 604,25 ↓ 608,50 610,75 611,75 611,25 608,00 602,25

Focus of the day: Singapore

In Singapore, total bunker sales for June have fallen to 3.47 million mt, down by 1.5% as compared to May. Bunker sales of MFO 500-CST, dropped to 641,000 mt from 644,000 mt, reflecting a stable demand for 500-CST usage on newer very large crude carriers (VLCC)s and container ships. The city-state port saw a slight drop of 2 percentage points to 11,565 vessels arrival in June as compared to previous month. The number of vessel calls by bunkering went down by 1.7 percentage point to 3,227 vessels as compared to 3,282 vessels in May. Meanwhile from the morning indications, with the crude falling slightly we might be seeing an increase in demand today here in Singapore. The earliest avails are from 20th July onwards.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-Jul 8:30 AM Jun 0.9% 0.6% 0.4% Empire Manufacturing Medium 15-Jul 8:30 AM Jul 3.0 7.8 9.46 Business Inventories Medium 15-Jul 10:00 AM May -0.2% 0.3% 0.1% Core CPI High 16-Jul 8:30 AM Jun 0.2% 0.2% - Industrial Production Medium 16-Jul 9:15 AM Jun 0.5% 0.0.% - NAHB Housing Market Index Medium 16-Jul 10:00 AM Jul 49 52 - Housing Starts Medium 17-Jul 8:30 AM Jun 925K 914K - Initial Claims Medium 18-Jul 8:30 AM 13-jul 345K 360K - Philadelphia Fed Medium 18-Jul 10:00 AM Jul 3.0 12.5 - Leading Indicators Medium 18-Jul 10:00 AM Jun 0.2% 0.1% -

Source: OW Risk Management