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 started the week under heavy selling pressure as the Middle East tensions eased. US and Russia both came to a deal to remove the Syrian chemical weapons and avoid military action. Investors liquidated some of their long positions yesterday as witnessed with the heavy morning sell-off with Brent losing nearly $3 in less than 2 hours. The decline in the crude prices was despite a weaker US dollar as Summers-Obama’s favorite and the more pro-stimulus tightening of the candidates- has withdrawn from the race to be the next US Federal Reserve Chairman. With Janet Yellen in the lead to take over, it could mean a more gradual approach to the monetary tightening. The market remains focus on the outcome of the US FOMC 2-day meeting starting today. China may have decelerated in August on slowing real estate activity after the Conference board leading economic index rose 0,7% after 1,4% in July. The October WTI futures fell -$1.62 to close at $106.59/bbl while the November Brent settled at $107,00/bbl, down -$2.71. Today, the German Zew will be released and later the US August Core CPI. This morning, crude prices are trading down.

Fueloil Specifics

The NWE bunker fuel oil prices weakened at the beginning of the week following lower crude values. Delivered 380cst product in Rotterdam was assessed app. $5/mt down and -$3/mt in Antwerp. Despite lower prices, demand remained sluggish in Rotterdam while suppliers continued to struggle with prompt inquiries. The Singapore fuel oil markets rose marginally between flat to +$2.5 during the morning Platts window yesterday. The delivered bunker premiums slipped to negative to parity between -$1.5 to +$0.5 above cargo prices as crude softened significantly after the window. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Oct Nov Q413 Q114 Q214 2014 NYMEX WTI Swap (1st month) (1,62) 106,59 ↓ 105,28 103,95 103,92 100,10 97,19 96,25 ICE Brent Swap (1st month) (2,71) 110,07 ↓ 109,29 108,36 107,58 106,84 106,13 103,31 ICE Gasoil Swap (1st month) (5,50) 944,25 ↓ 936,92 932,25 932,33 915,00 896,94 894,01 3.5% Barges FOB Rtdm (3,00) 590,50 ↑ 592,75 591,50 591,50 591,75 587,25 583,50 3.5% Cargoes FOB Med 0,25 592,50 ↑ 590,25 587,75 587,00 586,25 581,25 578,50 1.0% Cargoes FOB NWE (0,50) 616,75 ↑ 616,75 618,25 618,25 620,00 615,50 610,00 3% no. 6 USGC WB (0,25) 93,85 ↑ 93,10 92,85 92,60 92,35 92,05 91,10 380 CST Cargoes FOB S'pore 0,50 602,75 ↑ 605,75 606,75 605,75 606,50 604,75 602,50 0.1 % GO Barges FOB Rtdm (5,25) 942,25 ↓ 938,25 933,25 933,25 918,25 900,25 897,25 Physical Rotterdam 380 CST (5,00) 593,00 ↑ 598,00 596,75 596,75 596,50 591,50 587,75 Physical Singapore 380 CST (1,00) 603,00 ↑ 611,00 612,00 612,00 612,50 610,00 607,75

Focus of the day: ARA

On the demand side not much has changed, still not enough food in the rack of the suppliers. Although crude has dropped significantly after the President remembered what he got his Nobel Prize for, this cannot be said about the fuel cracks. These have surged over 4 dollars in the last week, which might be disappointing for buyers who bet on a different outcome. On the high sulphur side not much to be feared still. Last Friday the low sulphur situation seemed to have reached a climax. With a lot of uncertainty regarding loading over the weekend and ex-wharf suppliers rather paying demurrage than giving info on loading prospects, the lucky few who did have their hands on product could basically ask whatever they wanted. They sure kept the ‘beggars can’t be choosers’ saying in mind, asking as much as 15 dollars premium for prompt delivery. This morning it was heard through the grapevine that yet again some low sulphur batches proved to be off-spec. So expect more mayhem on the follow… On the gasoil market nothing spectacular going on. Notification periods for the different grades; three days for high sulphur enquiries and six working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire Manufacturing Medium 16-Sep 8:30 AM Sep 7.0 8.6 6.3 Industrial Production Medium 16-Sep 9:15 AM Aug 0.2% 0.0% 0.4% Core CPI High 17-Sep 8:30 AM Aug 0.2% 0.2% - NAHB Housing Market Index Medium 17-Sep 10:00 AM Sep 58 59 - Housing Starts Medium 18-Sep 8:30 AM Aug 900K 896K - FOMC Rate Decision High 18-Sep 2:00 PM Sep 0.25% 0.25% - Initial Claims Medium 19-Sep 8:30 AM 14-sep 335K 292K - Existing Home Sales Medium 19-Sep 10:00 AM Aug 5.00M 5.39M - Philadelphia Fed Medium 19-Sep 10:00 AM Sep 8.0 9.3 - Leading Indicators Medium 19-Sep 10:00 AM Aug 0.5% 0.6% -

Source: OW Risk Management