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

Another volatile trading session without market direction. Crude Oil traded sharply up in the European morning session for the gains to disappear going into the US close. There is growing fear of an impending showdown in Washington: “The US government could run short of funds to meet its obligations as soon as October the 17th unless the Congress votes to lift the debt ceiling before then”. Investors are also looking closely to the economic numbers and speculate on the next meeting in October as the Federal Reserve clearly said that they would act to taper the Bond buying program as soon as the economy is showing durable improvements. The US Oil inventory report saw a Crude Oil build of +2.64 mbbl against an expected draw of -1.13 mbbl. The November WTI contract lost -$0.47 to settle at $102.66/bbl and Brent lost -$0.32 to close at $108.32/bbl. Today, we will see the US weekly jobless claims and the 2nd Quarter revised GDP figures. This morning, crude prices are trading slightly higher.

Fueloil Specifics

The Northwest European bunker fuel oil markets reported increased demand and firming prices. Delivered 380cst product in Rotterdam and Antwerp was assessed nearly $8/mt higher versus previous days close. Suppliers continuously reported tight avails and kept higher premiums for prompt deliveries. The Singapore fuel oil market rebounded more than $4.0 during the Asian Platts window yesterday, erasing previous losses. The delivered bunker premiums were seen some $2.5-3.5/mt above cargo prices. Bunker fuel oil swaps gained up to $6.5/mt in the front of the forward curve both for Rtdam and Sing papers. The backend was weaker with cal14 papers assessed app.$4/mt up. This morning both markets are trading lower.

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) (0,47) 102,66 ↑ 102,59 101,89 101,81 98,72 96,03 95,20 ICE Brent Swap (1st month) (0,32) 108,32 ↑ 108,05 107,13 106,29 105,49 104,74 102,20 ICE Gasoil Swap (1st month) 13,00 919,00 ↓ 915,83 913,42 913,28 903,97 891,53 889,28 3.5% Barges FOB Rtdm 6,25 592,50 ↓ 588,75 585,50 585,75 583,75 578,50 574,50 3.5% Cargoes FOB Med 6,50 592,50 ↓ 585,25 580,25 580,50 576,75 571,75 568,75 1.0% Cargoes FOB NWE 6,75 603,50 ↓ 603,75 606,00 606,25 609,75 605,75 600,00 3% no. 6 USGC WB (0,77) 93,03 ↓ 91,90 91,40 91,40 90,90 90,10 89,40 380 CST Cargoes FOB S'pore 4,50 610,00 ↓ 608,75 604,00 603,75 598,50 595,75 592,75 0.1 % GO Barges FOB Rtdm 13,50 919,25 ↓ 917,25 914,25 914,25 902,25 890,25 889,25 Physical Rotterdam 380 CST 7,00 595,25 ↓ 594,00 590,75 591,00 588,50 582,75 578,75 Physical Singapore 380 CST 4,50 613,50 ↓ 614,00 609,25 610,00 604,50 601,00 598,00

Focus of the day: Houston

Demand has been weak in the US Gulf Coast during this weak, which together with a lower crude prices have driven down bunker prices. In Houston, limited availabilities prevailed and that´s helping to maintain the spreads open on the retail. Prices seen yesterday in Houston market were around $612-615/mt ex-wharf. There was more activity in New Orleans; the area has been suffering some heavy congestion in the last weeks, that´s probably the reason behind the particular high buying interest. Levels for IFO 380 were around $613-615/mt ex-wharf, which means the premium has narrowed down to $1-3/mt above Houston, significant change coming from peaks up to $8-10/mt. There is a steep backwardation on USG3%, around $8-10/mt for October for example. This current market structure can be attributed to several factors but probably one of the main could be the recent geopolitical events. Therefore we consider this a good scenario (tight avails, steep backwardation, and strong buying power in the area) for Short Term Physical Fixed Prices in the US Gulf Coast. Please contact RMS or the US Sourcing Center team for more information.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Case- Shiller 20-city Index Medium 24-Sep 9:00 AM Jul 10.0% 12.1% 12.4% Consumer Confidence High 24-Sep 10:00 AM Sep 83.0 81.5 79.7 MBA Mortgage Index Medium 25-Sep 7:00 AM 21-sep NA 11.2% 5.5% Durable Orders High 25-Sep 8:30 AM Aug -1.5% -7.4% 0.1% New Home Sales Medium 25-Sep 10:00 AM Aug 390K 394K 421K Initial Claims Medium 26-Sep 8:30 AM 21-sep 335K 309K - GDP- Third Estimate Medium 26-Sep 8:30 AM Q2 2.5% 2.5% - Pending Home Sales Medium 26-Sep 10:00 AM Aug -2.5% -1.3% - Personal Income Medium 27-Sep 8:30 AM Aug 0.2% 0.1% - PCE Prices- Core Medium 27-Sep 8:30 AM Aug 0.1% 0.1% - Michigan Sentiment- Final Medium 27-Sep 9:55 AM Sep 77.0 76.8 -

Source: OW Risk Management