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

Oil rebounded on Friday, led by gasoline futures as a string of refinery outages stoked concerns about fuel supplies in the heart of the U.S. summer driving season. This morning, China’s Q2 GDP came in at 7.5% y/y, in line with expectations. Retail sales were up at 13.3% y/y, but industrial production was down at 8.9% compared to previous month’s reading of 9.2%. August Brent traded up to its 200 day MA around $108.50 and managed to close above it. Much of the late session crude strength seemed to come from profit taking on RBOB cracks, as those sold off about $1 from their intraday highs. In sum, the complex is teetering on a breakout, and another bullish headline may be all that is needed to push Crude higher, though we would take caution at these levels, given the speed of the recent move. Looking ahead to this week, US macroeconomic data will include a raft of housing numbers and today’s Retail sales is likely to be watched closely. This morning crude is trading slightly down.

Fueloil Specifics

The Northwest European bunker fuel oil markets reported mixed demand last Friday. Delivered 380cst product in Rotterdam and Antwerp was assessed app.$2/mt higher versus previous days close. Rotterdam port reported low demand and delays at loading installations resulting in about two days waiting time. Antwerp on the other hand saw good buying interest. The combined effect of supply glut and weak marine demand continued to weigh on market sentiment, putting a downward pressure on the Singapore 380-CST marine prices. In China, fuel oil imports for June have fallen about 23% on-month to 2.18 million mt, due to low operating rate from teapot refiners during the month. Power companies in Japan for instance bought 7% more fuel oil in June from the previous month in preparation for peak summer demand, data showed on Friday. But compared to the same month last year, fuel oil demand in June reflected 36.7% dive to 4.68 million barrels as the utilities continued to cut imports of expensive oil by burning more coal. This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Aug Sep Oct Q413 Q114 2014 NYMEX WTI Swap (1st month) 0,00 105,95 ↓ 104,71 103,30 101,86 100,54 97,24 94,47 ICE Brent Swap (1st month) 1,08 108,81 ↓ 107,38 106,74 106,16 105,56 103,80 101,48 ICE Gasoil Swap (1st month) 4,75 916,25 ↓ 915,42 914,83 913,83 910,33 901,69 885,60 3.5% Barges FOB Rtdm 0,50 600,00 ↓ 589,50 585,50 584,50 582,25 580,75 572,75 3.5% Cargoes FOB Med 0,50 595,00 ↓ 583,25 579,75 577,25 575,25 573,25 568,25 1.0% Cargoes FOB NWE (0,25) 601,25 ↓ 607,00 610,25 611,75 610,25 609,00 599,25 3% no. 6 USGC WB 0,34 92,16 ↓ 91,75 92,00 91,50 91,70 91,00 90,25 380 CST Cargoes FOB S'pore (4,25) 595,75 ↓ 601,75 603,75 605,25 606,50 603,75 597,75 0.1 % GO Barges FOB Rtdm 5,25 917,25 ↓ 916,25 916,25 914,25 911,25 903,25 886,25 Physical Rotterdam 380 CST 2,00 604,00 ↓ 594,75 590,75 588,75 587,00 585,00 577,00 Physical Singapore 380 CST (5,00) 600,00 ↓ 607,00 609,00 610,50 610,25 607,00 601,00

Focus of the day: Gibraltar

The week starts with operations running smoothly in the three ports of the Gibraltar Strait, and only one supplier with barges slightly behind schedule. There is good product avails in the hub and weather forecast for the rest of the week is fine, only with some fog that could show up in the early mornings affecting visibility. With the growing number of barges in the hub, prompt requirements are still possible to accommodate for most suppliers. CIF Med 3.5% is trading some 7 usd/mt above FOB Barges Rotterdam and the HILO spread is narrowing to 9 usd/mt in the Med, with the premium to CIF Med 1% over FOB NWE 1% at 15 usd/mt. Demand seems to be picking up today on quite competitive bunker premiums after a rather quiet end of last week. The Med market is trading down this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-Jul 8:30 AM Jun 0.9% 0.6% - Empire Manufacturing Medium 15-Jul 8:30 AM Jul 3.0 7.8 - Business Inventories Medium 15-Jul 10:00 AM May -0.2% 0.3% - Core CPI High 16-Jul 8:30 AM Jun 0.2% 0.2% - Industrial Production Medium 16-Jul 9:15 AM Jun 0.5% 0.0.% - NAHB Housing Market Index Medium 16-Jul 10:00 AM Jul 49 52 - Housing Starts Medium 17-Jul 8:30 AM Jun 925K 914K - Initial Claims Medium 18-Jul 8:30 AM 13-jul 345K 360K - Philadelphia Fed Medium 18-Jul 10:00 AM Jul 3.0 12.5 - Leading Indicators Medium 18-Jul 10:00 AM Jun 0.2% 0.1% -

Source: OW Risk Management