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

Yesterday Crude Oil found some support and traded in a narrow range after the previous day’s sharp sell-off. The September WTI contract closed at $88.50/bbl, up only +$0.36 and September Brent inched up +$0.16 to $103.42/bbl.. Iranian and EU officials met yesterday for another round of discussion over the nuclear issue. Market mood is still very cautious after the recent rise in Spanish yield (10 yrs at 7,6%) and fears of a full bailout. Also China economic slowdown is weighting on market sentiment. This morning the German IFO came out slightly lower than expected and the UK Q2 GDP fell most in 3 years at -0,7%. The US inventory from API showed more than expected build across the crude and product stockpile. The US Energy department will release its Weekly Inventory Report later today and the expectations are as follows: Crude -0.7 mbbl, Distillates +1.1 mbbl, Gasoline -0.6 mbbl. This morning, crude is trading slightly up.

Fueloil Specifics

Rotterdam 380cst delivered fuel oil prices softened again yesterday loosing nearly $8/mt. Cargo prices were a bit stronger posting only a few dollars loss. Suppliers in Rotterdam still report tight product avails for prompt deliveries. Some suppliers said they would not be able to offer LSFO before July 31. The Singapore fuel oil market prices were pretty flattish ranging from -$0.3 to +$1.4 during the morning window yesterday. Market demand remains slow and the incoming cargoes for August are estimated at 4.0 million mt. The delivered bunker premiums were around $7.0 above cargo prices yesterday. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Aug Sep Oct Q412 Q113 2013 NYMEX WTI Swap (1st month) 0.36 88.50 ↑ 88.60 88.89 89.19 89.40 90.05 89.40 ICE Brent Swap (1st month) 0.16 103.42 ↑ 103.12 102.45 102.06 101.75 101.05 101.75 ICE Gasoil Swap (1st month) (6.50) 888.25 ↑ 890.25 889.25 886.75 884.17 878.44 872.76 3.5% Barges FOB Rtdm (2.00) 589.25 ↑ 589.00 586.25 584.00 582.00 577.50 596.75 3.5% Cargoes FOB Med (5.00) 577.75 ↑ 583.75 581.50 579.50 577.50 573.00 565.75 1.0% Cargoes FOB NWE (2.00) 628.50 ↑ 626.00 621.75 618.00 615.00 607.75 600.25 3% no. 6 USGC WB 0.20 92.10 ↑ 92.02 91.77 91.27 89.77 89.27 89.52 380 CST Cargoes FOB S'pore 1.25 615.50 ↑ 612.00 609.50 607.50 606.00 601.25 593.50 0.1 % GO Barges FOB Rtdm (5.25) 885.00 ↑ 890.25 889.25 887.25 885.25 880.25 874.25 Physical Rotterdam 380 CST (8.00) 597.00 ↑ 599.25 596.50 594.25 592.25 587.75 580.00 Physical Singapore 380 CST 1.00 622.50 ↑ 622.25 619.75 617.75 616.75 612.00 504.25

Focus of the day: Singapore

Singapore's onshore fuel oil stocks fell by 16%, a drop of 3.3 million barrels to 17.4 million barrels which saw stocks hitting a 13-week low. Weaker imports from the West and Middle East accounted for the downward movement. Imports from the West fell more than 70% from the previous week to around 225,000 mt. Arrivals are expected to remain low, traders said, as Western arbitrage arrivals are to be capped below 3 million mt for July. Middle Eastern exports to Asia continued to dwindle as domestic power generation needs peak during the summer. Inflows from the Middle East declined 30% to 94,000 mt. Traders said fuel oil demand from Chinese 'teapot refiners' remains weak as outright prices have increased due to high underlying crude prices. The price of intermediate fuel oil material was mainly down on Tuesday while supplies of marine fuels were fine at most key Asian ports on Tuesday. In Singapore, the price of 380cst grade fell $2 to $618.50/mt while marine gas oil (MGO) dipped $7 to $898/mt. Demand was largely below average and supplies were fine. July 31 was the earliest date for deliveries of bunker fuels.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual FHFA Housing Price Index Medium 24-Jul 10:00 AM May NA 0.8% 0.8% MBA Mortgage Index Medium 25-Jul 7:00 AM 21-Jul NA NA - New Home Sales Medium 25-Jul 10:00 AM June 375K 369K - Initial Claims Medium 26-Jul 8:30 AM 21-Jul 365K 386K - Durable Orders High 26-Jul 8:30 AM June 1.0% 1.3% - Pending Home Sales Medium 26-Jul 10:00 AM June 1.0% 5.9% - GDP- Adv. High 27-Jul 8:30 AM Q2 NA 1.9% - Michigan Sentiment- Final Medium 27-Jul 9:55 AM July 71.5 72.0 -

Source: OW Risk Management