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 drop in crude prices yesterday. The July WTI contract went below the $90 mark closing at $89.90/bbl, down -$1.95 and Brent at $105.56/b down-$2.85. The US Inventory Report from the US Energy Department yesterday looks supportive with a crude building only of 0.9 mbbl, less than expected, while the product inventory especially Gasoline stockpile saw a big draw of -3.3 mbbl. Few houses are actually mentioning that despite a ninth week in a row of stock building in US Inventories that overall there was barely a build in total observable oil stocks in April (+0,9 Mbbl), if it is true stocks will end the month at low levels , particularly for the 3 main products Gasoil, Middle Distillate and Residual Fuel Oil which could valid Goldman Sachs view of a strong rebound once the focus on Greece is a bit behind the scene. For the time being without any major other news Market sentiment is following the Eurozone troubles . The World Bank revised downwards China growth forecast and the latest Chinese PMI data showed a decline for the seventh straight month and increase the probability of growth stimulus. Despite a weak PMIs from Europe this morning are weighting the market crude is trading slightly higher.

Fueloil Specifics

The NWE fuel oil market closed yesterday with double digit losses following weaker crude. Delivered 380cst product in Rotterdam was down app.$10/mt while cargo prices lost even more, down by nearly $12/mt. Dropping prices in the area resulted in fewer enquiries seen in the market as many buyers decided to wait. The Singapore fuel oil markets lost more than $3.5 during the morning window yesterday. Market has been supported by BP and Brightoil who are buying actively. The delivered bunker premiums were firm at around $6.0 above cargo prices. Both Rotterdam and Singapore swaps lost in a range of $11.75-10.75/mt along the forward curve. This morning both markets continue trading down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q312 Q412 2013 NYMEX WTI Swap (1st month) - 89.90 ↑ 90.55 90.86 91.10 91.07 91.66 91.66 ICE Brent Swap (1st month) (2.85) 105.56 ↑ 105.50 105.01 104.48 104.51 103.45 103.45 ICE Gasoil Swap (1st month) (14.50) 903.25 ↓ 897.83 895.25 895.11 895.00 895.00 884.18 3.5% Barges FOB Rtdm (12.00) 611.75 ↓ 606.75 603.00 600.00 600.00 591.50 575.25 3.5% Cargoes FOB Med (9.00) 610.25 ↓ 601.50 598.00 595.50 595.50 587.00 570.75 1.0% Cargoes FOB NWE (14.00) 647.25 ↓ 643.50 642.00 639.00 638.75 627.00 609.25 3% no. 6 USGC WB (1.43) 94.45 ↑ 94.45 94.03 93.63 92.48 91.53 90.12 380 CST Cargoes FOB S'pore (3.75) 646.75 ↓ 635.75 630.75 627.00 628.25 618.75 600.50 0.1 % GO Barges FOB Rtdm (16.50) 904.25 ↓ 897.25 895.25 895.25 895.25 894.25 886.25 Physical Rotterdam 380 CST (10.00) 621.00 ↓ 617.00 613.25 610.25 610.25 601.75 585.50 Physical Singapore 380 CST (1.00) 655.00 ↓ 646.00 641.00 637.25 639.00 629.50 611.25

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Existing Home Sales Medium 22-May 10:00 AM Apr 4.65M 4.48M 4.62M New Home Sales Medium 23-May 10:00 AM Apr 340K 328K 340K FHFA Housing Price Index Medium 23-May 10:00 AM Mar NA 0.3% 1.8% Initial Claims Medium 24-May 8:30 AM 19-May 365K 370K - Durable Orders High 24-May 8:30 AM Apr 0.3% -3.9% - Michigan Sentiment-Final Medium 25-May 9:55 AM May 77.5 77.8 -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 107.00 91.10 907.45 Next 108.30 91.90 914.95 Strong 109.95 93.60 928.15 Support Brent WTI GO Near 104.95 89.85 888.25 Next 103.35 88.50 879.90 Strong 103.35 88.50 879.90       Energy futures lost a lot since the last technical view we published. Technical picture remains worrying, though we see a few hints of a coming recovery: indicators are largely oversold; we anticipate a forming RSI divergence on all charts more or less. Should we have any support from other factors such as currencies or equities we might start moving up again. However, the contracts come to very important supports which shall hold to keep the technical picture unchanged. They are @ 104.95 and 103.35 for Brent, @ 89.85 and 88.5 for WTI and @ 888.25 and 899.75 (!) for GO. The last one has been violated this morning, which is a strong worrying signal. Watch the rest of them, the picture would turn to bearish if the levels fail to hold.

Source: OW Risk Management