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 rallied during the European session to lose some steam towards the US close. The February WTI contract slipped -$0.09 to $93.15/bbl and  Brent  rose by +$0.54 to $111.94/bbl. Market mood seems positive since the beginning of the week. The API inventory report showed a bearish picture with big builds on gasoil and product stockpiles which also capped the rally yesterday. The more widely watched US Energy department will release its inventory report later today and the expectations are as follows: Crude +1.5 mbbl, Distillates +2.0 mbbl, Gasoline +2.3 mbbl. It was reported that US oil imports will fall to 25 years low next year due to boosting production and only slightly growing demand. Market remains cautious awaiting US corporate earnings release and also Chinese trade figures. This morning, crude is trading slightly down.

Fueloil Specifics

The Northwest European bunker fuel oil markets inched slightly yesterday following stronger crude. 3.5% Rtdam fob barges were assessed up by app.$2/mt while delivered 380cst product in Rotterdam was app.$4/mt higher versus previous day close. Rotterdam port reported tight LSFO avails while Antwerp was struggling with HSFO. The Singapore markets managed to inch marginally up around flat to +$1.0 during the Platts window yesterday. The previous day's strength in buying interest dipped as players saw the strength as a temporary driven by European tightness previously. The delivered bunker premiums were firmer, between $5.5-7.0 above cargo prices. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q213 Q313 2013 NYMEX WTI Swap (1st month) (0,04) 93,15 ↓ 93,56 93,96 94,28 94,53 94,67 94,29 ICE Brent Swap (1st month) 0,54 111,94 ↓ 110,46 109,82 109,26 108,69 106,92 107,86 ICE Gasoil Swap (1st month) 6,75 945,25 ↑ 947,00 942,58 937,67 933,33 924,72 930,62 3.5% Barges FOB Rtdm 2,50 606,75 ↑ 606,00 605,50 605,00 604,25 601,00 602,00 3.5% Cargoes FOB Med 6,50 603,00 ↑ 599,50 600,00 599,00 598,75 596,00 596,75 1.0% Cargoes FOB NWE 5,25 631,00 ↑ 634,00 635,25 635,00 634,75 633,25 632,25 3% no. 6 USGC WB (0,62) 96,93 ↓ 96,70 95,95 95,45 94,95 94,20 94,70 380 CST Cargoes FOB S'pore 0,75 629,00 ↑ 632,25 630,50 630,00 628,75 625,75 626,75 0.1 % GO Barges FOB Rtdm 6,75 945,00 ↑ 947,25 943,25 938,25 934,25 924,25 930,25 Physical Rotterdam 380 CST 4,00 611,00 ↑ 613,25 612,75 612,25 611,50 608,25 609,25 Physical Singapore 380 CST 2,50 635,00 ↑ 639,50 637,75 637,25 636,00 633,00 634,00

Focus of the day: Singapore

Onshore stocks of fuel oil in Singapore fell to a 13-week low, with inventories dropping by 646,000bbl to 18.819mbbl, data showed. Demand from South Korea's power generating sector was strong, partially because two of the country's nuclear reactors have been shutdown for safety checks. Western arbitrage arrivals remained high at about 800,000mt for the week. Chinese 'teapot' refiners may be allowed to use imported crude oil, a move which would undermine fuel oil demand. ChemChina is expected to get an annual quota of 10 million metric tonnes to import crude oil starting this year. Analysts expect other teapot refinery operators to be granted crude import quotas. The refineries, which use fuel oil as feedstock, form part of the demand landscape at Singapore and their absence would be felt in the market. Bunker prices mostly rose across key Asian ports on Tuesday. In Singapore, benchmark 380cst bunker fuel increased by $2.50 to close at $630.00/mt. Marine gas oil was up by $5.50, to average at $940.50 pmt. Demand ranged from below average to average, said traders. Supplies were fine while earliest deliveries were available from January 14-15 onwards.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Credit Medium 08-jan 3:00 PM Nov $8.0B $14.2B $16.0B MBA Mortgage Index Medium 09-jan 7:00 AM 05-jan NA NA - Initial Claims Medium 10-jan 8:30 AM 05-jan 365K 372K - Wholesale Inventories Medium 10-jan 10:00 AM Nov 0.2% 0.6% - Trade Balance Medium 11-jan 8:30 AM Nov -$45.0B -$42.2B - Treasury Budget Medium 11-jan 2:00 PM Dec NA -$86.0B -

Source: OW Risk Management