Market in Brief

Crude prices were trading mostly in a range manner affected by thinner volumes due to the shutdown of floor trading in NYMEX as Hurricane Sandy impacted the Eastern part of US. The December Brent contracts settled $109.44, dipping -$0.11 while WTI futures closed at $85.54/bbl, down -$0.74. The WTI came under pressure as Hurricane Sandy forced the closure of over two-thirds of the US East Cost refining sector, roads and airports, resulting in a sharp fall in crude oil demand. The Euros weakened yesterday against the USD on ongoing Eurozone troubles and pressured dollar denominated crude futures lower. Today traders are preparing for another day with closed financial markets in the US. In terms of economic data, it will be relatively quiet day. Earlier this morning German unemployment rate was reported at 6.9% vs. 6.8% in September, rising for a seventh month in a row while Eurozone economic sentiment kept its downward trend in October at 84.5 vs. 85.2 in September. Later in the afternoon we will have US Case-Shiller 20-city Index. This morning, crude is trading up.
 

Fueloil Specifics

The Northwest European fuel oil markets started the week with a loss. Delivered 380cst product in Rotterdam was assessed app.$5/mt down following weaker cargo prices that lost more than $8/mt compared to previous day closing. Prompt hsfo deliveries in Rotterdam remain effected by operational delays at loading installations. The Singapore fuel oil markets fell marginally app. -$2.0 during the Platts window yesterday tracking crude movements. Market continues to be weak in Singapore as heavy incoming supplies are expected. The cargo premiums were seen at $0.5-1.0/mt. The delivered bunker premiums were around $6.25 above cargo prices. Bunker fuel oil swaps lost nearly $10/mt at the front of the forward curve both for Singapore and Rotterdam papers. Meanwhile backend was significantly stronger, posting, app.$5/mt losses. This morning both markets are trading slightly higher.
 

Settlement & Indications (mid values)

Today's fact box

MALTA – FOCUS

Demand in Malta has been at normal levels so far this week. Premium towards CIF Med is fairly low even though MED Cargoes weakened against NWE Cargoes. As winter season approaches we would expect avails to tighten – Therefore we recommend entering longer term contracts to secure avails in Malta.

General comments MED:

Usually heading into winter, we would expect to see an increase in fuel oil flow from the Black Sea into the Med, as Northwest Russia river navigation routes freeze over.
"Black Sea exports have yet to increase," said one trader, citing weather-related delays and closures. Also, seasonal demand patterns did not always apply.
In terms of cargoes, the Mediterranean will be well supplied, from Israel's ORL, Greece's MOH, and Black Sea material. "Overall, there's enough oil available to meet demand in November“.
 

Economy fundamentals this week