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 were volatile falling 5/6 usd during the week but rebounding strongly on Friday back to the previous week level. The September WTI contract surged by +$2.57 to close at $105.97/bbl while Brent closed at $108.22/bbl, up by +$1.54. The crude prices decline seen last week could be attributed to profit taking as investors pared down their long positions in anticipation of the US Federal Reserve stimulus package reduction in the coming weeks. Last Friday’s sharp rally appeared to be triggered by positive signs of Chinese oil demand and concerns of possible supply disruptions in the North Sea and Middle East. The International Energy Agency (IEA) estimated the Libyan supply production has fallen by 600k barrels per day (bpd) to 400k bpd. Japan missed its GDP estimate in the second quarter (+2,6% annualized vs 3,6% expected) but  China stocks rose to the highest in almost two months amid optimism of a stabilizing economy. This morning, crude is trading flat slightly down (Brent) to flat (WTI).

Fueloil Specifics

The Northwest European bunker fuel oil prices lost a few dollars last Friday. Delivered 380cst in Rotterdam and Antwerp was assessed app.$3/mt down vs previous days close. Demand in the area remained steady mostly with small enquiries. MGO, on the other hand, followed general market trend and was assessed nearly $7/mt up from previous close. The Singapore fuel oil markets have been closed for public holiday last Thursday and Friday and reopen today. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Sep Oct Nov Q413 Q114 2014 NYMEX WTI Swap (1st month) 2,57 105,97 ↓ 104,72 103,27 101,76 101,82 98,21 94,95 ICE Brent Swap (1st month) 1,54 108,22 ↓ 106,32 105,65 105,07 105,09 103,57 101,34 ICE Gasoil Swap (1st month) 7,75 903,75 ↑ 914,42 913,08 909,75 909,94 899,64 883,90 3.5% Barges FOB Rtdm (2,25) 583,50 ↑ 578,75 576,00 576,00 575,50 576,75 571,00 3.5% Cargoes FOB Med 0,00 586,25 ↑ 572,75 570,50 569,25 567,75 566,25 566,25 1.0% Cargoes FOB NWE 1,25 593,75 ↑ 601,00 602,75 603,50 603,25 605,00 597,25 3% no. 6 USGC WB 1,17 92,56 ↓ 90,65 90,40 89,90 90,35 89,40 89,40 380 CST Cargoes FOB S'pore (4,75) 595,00 ↑ 597,25 597,75 596,50 596,25 593,75 591,75 0.1 % GO Barges FOB Rtdm 7,00 902,75 ↑ 915,25 914,25 911,25 911,25 901,25 885,25 Physical Rotterdam 380 CST (3,00) 590,00 ↑ 584,00 581,25 580,25 580,25 581,00 575,25 Physical Singapore 380 CST (4,50) 602,00 ↑ 602,50 603,00 601,75 601,00 598,00 596,00

Focus of the day: Gibraltar

Growing tension between Spain and UK for the Gibraltar case is not affecting the bunker market, but the creation by Gibraltar of an artificial reef Northwest of the Airport Western runaway has reduced the depth of available water by up to 1.5m from the charted depths in that area, which is mainly used for fishing purposes by Spanish fishermen. Fine weather conditions this morning in the hub, where all suppliers except two, have barges running smoothly within schedule. There is lack of LSFO avails for some, which pulled the premiums up since end last week. Prompt requirements are still possible to accommodate for most suppliers. CIF Med 3.5% is trading some 15 usd/mt above FOB Barges Rotterdam and the HILO spread finally widening to 11 usd/mt in the Med, with the premium of CIF Med 1% over FOB NWE 1% at 16 usd/mt. The Med market is trading up this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Treasury Budget Medium 12-Aug 2:00 PM Jul -$96.0B -$69.9B - Retail Sales Medium 13-Aug 8:30 AM Jul -0.1% 0.4% - Business Inventories Medium 13-Aug 10:00 AM Jun 0.0% 0.1% - MBA Mortgage Index Medium 14-Aug 7:00 AM 10-aug NA 0.2% - Core PPI Medium 14-Aug 8:30 AM Jul 0.2% 0.2% - Initial Claims Medium 15-Aug 8:30 AM 10-aug 340K 333K - Core CPI Medium 15-Aug 8:30 AM Jul 0.2% 0.2% - Empire Manufacturing Medium 15-Aug 8:30 AM Aug 5.0 9.46 - Industrial Production Medium 15-Aug 9:15 AM Jul 1.0% 0.3% - Philadelphia Fed Medium 15-Aug 10:00 AM Aug 10.0 19.8 - Productivity- Prel Medium 16-Aug 8:30 AM Q2 0.0% 0.5% - Mich Sentiment Medium 16-Aug 9:55 AM Aug 85.1 85.1 -

Source: OW Risk Management