Market in Brief

Crude prices closed higher yesterday. Market was temporary taking its cue elsewhere away from the Eurozone crisis. The US home prices fell less than expected however, the bullish mood was less upbeat after a lower US June consumer confidence data. The US inventory compiled by API yesterday showed a crude build and took away some support from the August WTI futures which only managed to rise marginally by +$0.15 to close at $79.36/bbl. The Brent contract on the other hand surged more than +$2.01 to $93.02/bbl, supported by a strike from oil workers in Norway taking 180k barrels per day out of the Market. Iran has mentioned that crude export may decline by as much as 30% due to oil field maintenance and also EU's official sanction which will start next week. Nevertheless we expect the 0,8 MB barrels estimated out of the market from Iran to be compensated by higher production from Iraq, Libya and Saudi Arabia. The US Energy department will release the Weekly Inventory report later today and the expectations are as follows: Crude -0.5 mbbl, Distillates +1.2 mbbl, Gasoline +0.8 mbbl. Market is generally waiting expectantly for the outcome of the EU summit this coming Friday. This morning, crude is trading down.
 

Fueloil Specifics

The NWE fuel oil prices firmed yesterday following stronger crude. Delivered 380cst product was assessed app. $5/mt up while cargo prices posted $7/mt gains. Prices in the area were supported by ongoing tight avails both for LSFO and HSFO products. The Singapore fuel oil markets extended its strength, up around +$5.0 during the morning window yesterday tracking crude movement. The market seems to be getting tight moving forward as July incoming cargoes are estimated to be only 2.1 million mt so far. The bunker premiums were seen app. $8.3 above cargo prices. Bunker fuel oil swaps posted app.$8.5/mt gains at the front of the forward curve both for Rotterdam and Singapore papers. Backend was slightly weaker, up by app.$7/mt. This morning both markets are trading slightly higher.
 

Settlement & Indications (mid values)

Focus of the day: Singapore

Singapore's onshore fuel oil stocks fell to a four-week low. They dropped by 358,000 barrels to 19.24 million barrels, a week-on-week fall of 1.8%. It was the third straight week that stocks were down. Traders said that imports from the West had fallen in line with expectations of lower arbitrage arrivals. Arbitrage volumes were expected to continue to fall in the weeks ahead. Exports to China and other regional markets remained strong. Observers say low arbitrage volumes and high bunker demand could tighten regional fundamentals.
In Singapore bunkers, the price of 380cst material rose by $2 to $570.20/mt. Marine gas oil dropped $5.50 to $809/mt. Enquiries were "low" to "average" and avails were sufficient. July 2 was the earliest date for bunker deliveries.
 

Economy fundamentals this week