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 closed near the top after a bullish week. The dollar softened following weaker economic data and a dovish posture from the new US Federal Reserve Chairman in January; Janet Yellen regarding the stimulus measures. The December WTI contract settled at $93.84/bbl up +$0.08 and  Brent -$0.04 at $108.50/bbl which maintained a good $14 spread between Brent and WTI. Saudi Arabia Oil exports surged to a eight-year high in September at 10,12 mbbl and boosted Oil exports by 300 000 bbl to 7,84 mbbl . Supply so far has been more than enough especially in the US where stockpiles rose to 388,1mbb last week and output surged to the highest rate since 1989. That plus a diminished Middle East Risk premium could send some bearish pressure to the Oil market. Nevertheless there are some cyclical factors to take in account as we are approaching the winter season and the end of the year where trader books are closed and  trend turns slowly to the upside quite often. This morning, crude are trading marginally lower.

Fueloil Specifics

The Northwest European bunker fuel oil prices closed last week on the higher side supported by increasing demand and continuously tight avails. Delivered 380cst product in Rotterdam and Antwerp was assessed app.$2/mt higher vs previous close. The Singapore fuel oil market rose app.$5.0 last Friday during the Asian Platts window. The latest Singapore heavy residual inventory saw a build of +3.81 mbbl to 20.73 mbbl. The delivered bunker premium eased to $7.0 to $10.0 above cargo prices last Friday. Bunker fuel oil swaps gained up to $6/mt at the front of the forward curve both for Rotterdam and Singapore papers. The backend was slightly weaker with cal 2014 assessed app.$4.5/mt up. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Dec Jan Feb Q114 Q214 2014 NYMEX WTI Swap (1st month) 0,08 93,84 ↓ 94,43 94,74 94,81 94,72 94,15 93,29 ICE Brent Swap (1st month) (0,04) 108,50 ↓ 108,04 107,63 107,27 106,93 106,24 105,39 ICE Gasoil Swap (1st month) 2,50 911,25 ↑ 911,58 911,33 910,33 910,42 905,39 903,38 3.5% Barges FOB Rtdm 2,75 571,75 ↑ 571,25 574,75 575,50 576,00 577,50 576,25 3.5% Cargoes FOB Med 7,00 576,25 ↑ 568,25 570,75 571,00 570,50 571,50 571,25 1.0% Cargoes FOB NWE 3,25 592,50 ↑ 595,75 599,25 600,50 600,50 602,00 600,00 3% no. 6 USGC WB 0,39 89,55 ↓ 90,00 90,00 90,00 90,00 89,95 89,75 380 CST Cargoes FOB S'pore 5,00 600,00 ↑ 597,50 594,00 593,75 594,25 595,00 595,00 0.1 % GO Barges FOB Rtdm 3,00 911,25 ↑ 913,25 912,25 909,25 911,25 905,25 903,25 Physical Rotterdam 380 CST 2,00 576,25 ↑ 576,50 580,00 580,75 580,75 581,75 580,50 Physical Singapore 380 CST 5,25 606,50 ↑ 601,75 599,25 599,00 599,50 600,25 600,25

Focus of the day: Gibraltar

The Gibraltar Strait is having a smooth start of the week, with fine weather conditions and good products availability at the three ports. No signs of congestion and all suppliers running smoothly. Despite the competitive bunker premiums in the start up, the demand is relatively weak so far this morning. Prompt requirements are still possible to accommodate. CIF Med 3.5% is trading some $17/mt above FOB Barges Rotterdam on a widening spread. The HILO is also widening, currently around $26/mt in the Med, with the CIF Med 1% premium over FOB NWE 1% at $21/mt. The Med market is trading up this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual NAHB Housing Market Index Medium 18-Nov 10:00 AM Nov 53 55 - Employment Cost Index Medium 19-Nov 8:30 AM Q3 0.5% 0.5% - Retail Sales High 20-Nov 8:30 AM Oct 0.3% -0.1% - Core CPI High 20-Nov 8:30 AM Oct 0.1% 0.1% - Existing Home Sales Medium 20-Nov 10:00 AM Oct 4.95M 5.29M - Business Inventories Medium 20-Nov 10:00 AM Sep 0.0% 0.3% - Initial Claims Medium 21-Nov 8:30 AM 16-nov 335K 339K - Core PPI Medium 21-Nov 8:30 AM Oct 0.1% 0.1% - Philadelphia Fed Medium 21-Nov 10:00 AM Nov 5.0 19.8 - Leading Indicators Medium 21-Nov 10:00 AM Oct NA 0.7% -

Source: OW Risk Management