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

Crude prices rose higher amid increased tensions between Israel and Hamas. The December WTI futures expired on Friday at $86.67/bbl, down -$1.22 and the January contract closed at $86.92/bbl, up +$1.05. The January Brent futures closed at $108.95/bbl, up +$0.94 last Friday. Markets are concerned about any escalations in Gaza and stronger rhetoric from the Arab leaders. The other worried point for the market is the ongoing discussions about the US fiscal cliff –a 600bn combination of tax rises and spending cuts that could tip the US economy into recession. Last Friday the US congressional leaders met with President Obama pledging to come to a consensus on taxes and spending that would reduce deficits and yet maintained economic growth. The latest US October Industrial production fell -0.4% as reported, not a good number in all regards even taking in account Hurricane Sandy effect. This morning, crude prices are trading up.

Fueloil Specifics

The Northwest European fuel oil prices in the largest ports closed the week with lower prices and soft buying interest. Both delivered 380cst product in Rotterdam and cargo prices were assessed nearly $10/mt down versus previous day close. HSFO and LSFO bunker fuel oil premiums for prompt deliveries in Rotterdam remained strong. Sources said they expect further difficulties with product loadings due to tight supplies in the coming week following some arbitrage fixtures for export. The Singapore markets fell app.$1.5 during the morning window last Friday. The fundamentals did not seem to have improved with soft demand and ample supply. The delivered bunker premiums were around +$5.0 to $6.5 above cargo prices last Friday. This morning both markets are trading up.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Dec Jan Feb Q113 Q213 2013 NYMEX WTI Swap (1st month) 1.05 86.92 ↑ 88.05 88.57 89.07 89.06 89.97 89.82 ICE Brent Swap (1st month) 0.94 108.95 ↑ 109.25 108.56 108.03 108.06 106.75 106.08 ICE Gasoil Swap (1st month) (10.50) 920.50 ↑ 938.67 938.08 935.33 935.06 928.61 925.38 3.5% Barges FOB Rtdm (9.50) 581.00 ↑ 589.50 592.50 595.00 594.75 598.75 597.75 3.5% Cargoes FOB Med (8.00) 571.50 ↑ 580.00 585.25 585.00 588.25 592.50 592.75 1.0% Cargoes FOB NWE (6.50) 605.75 ↑ 614.00 618.50 621.75 621.50 627.00 626.00 3% no. 6 USGC WB 0.00 92.48 ↑ 92.76 92.98 93.18 93.45 93.33 93.21 380 CST Cargoes FOB S'pore (1.25) 609.75 ↑ 614.25 616.25 618.75 618.50 623.25 622.25 0.1 % GO Barges FOB Rtdm (10.25) 918.75 ↑ 939.25 938.25 936.25 936.25 928.25 926.25 Physical Rotterdam 380 CST (10.00) 589.25 ↑ 599.75 602.75 605.25 605.00 609.00 608.00 Physical Singapore 380 CST (1.50) 615.00 ↑ 624.50 626.50 629.00 629.25 634.00 633.00

Focus of the day: Gibraltar

The week starts with good avails of product and fine weather forecast in the Gibraltar Strait. The three ports are running smoothly this morning and only a couple of suppliers in the hub are still behind schedule since last week. Bunker premiums seen this morning are lower than last week, which was rather slow in terms of demand. CIF Med 3.5% is trading only some 5 usd above FOB barges Rotterdam this morning and the HILO spread is only at 26 usd. The Med market is trading up this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Existing Home Sales Medium 19-Nov 10:00 AM Oct 4.75M 4.75M - Housing Starts Medium 20-Nov 8:30 AM Oct 840K 872K - Building Permits Medium 20-Nov 8:30 AM Oct 865K 894K - Initial Claims Medium 21-Nov 8:30 AM 17-Nov 400K 439K - Michigan Sentiment- Final High 21-Nov 9:55 AM Nov 84.5 84.9 - Leading Indicators Medium 21-Nov 10:00 AM Oct 0.1% 0.6% -

Source: OW Risk Management