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 closed mixed yesterday. The November WTI contracts inched +$0.24 and closed at $92.09/bbl, while November Brent futures expired at $115.07/bbl, down -$0.73. The WTI to Brent spread hit a record $24.28 yesterday. The December Brent futures settled $114.00/bbl, down -$0.40 yesterday. Market was trading mostly directionless mainly supported by the Middle East geopolitical development. In addition, the oil field maintenance in the North Sea has been delayed which also supported Brent futures against the US crude marker. The latest US API inventory report showed higher than expected build in crude inventories and a surprising build in distillates stockpile while there was reported a draw in gasoline. The US Energy department will be releasing the inventory report later today and the expectations are as follows: Crude +1.7 mbbl, Distillates -1.2 mbbl, Gasoline +0.5 mbbl. This morning, crude is trading mixed, with Brent down -0,3 at the moment.

Fueloil Specifics

The NWE bunker fuel oil prices rebounded slightly yesterday. Delivered 380cst product in Rotterdam was assessed app.$3/mt up while cargo prices posted app.$1/mt gains. Demand in the area remained sluggish. Rotterdam reported ongoing tight hsfo avails due to arbitrage to Asia earlier in the month. Singapore fuel oil markets erased previous day loss, gaining $1.75 -2.25 during the morning Platts window. The Singapore market is expected to receive 5.2 million mt which is 50% more than the previous month. The delivered bunker premiums edged up slightly to $6.25 above cargo prices yesterday. Bunker fuel oil swaps gained app.$3/mt at the front and up to $5.5/mt at the backend of the forward curve both for Singapore and Rotterdam papers. This morning both markets are trading slightly down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Nov Dec Jan Q113 Q213 2013 NYMEX WTI Swap (1st month) 0.24 92.09 ↑ 92.76 93.22 93.66 94.05 94.70 94.42 ICE Brent Swap (1st month) (0.40) 114.00 ↓ 113.40 112.76 112.21 111.68 109.99 109.19 ICE Gasoil Swap (1st month) 5.50 1003.25 ↓ 989.92 980.67 973.92 966.96 950.03 948.83 3.5% Barges FOB Rtdm 1.25 617.25 ↓ 617.50 618.50 619.75 620.50 618.00 616.00 3.5% Cargoes FOB Med 3.75 619.50 ↓ 612.25 612.75 612.50 615.50 613.75 612.00 1.0% Cargoes FOB NWE (0.75) 640.50 ↓ 645.00 647.25 649.00 650.25 648.75 646.75 3% no. 6 USGC WB (0.70) 97.45 ↓ 97.13 96.98 97.03 97.03 96.63 96.28 380 CST Cargoes FOB S'pore 1.75 649.25 ↓ 640.75 640.50 641.00 641.75 640.50 638.25 0.1 % GO Barges FOB Rtdm 4.75 1015.25 ↓ 990.25 981.25 974.25 969.25 954.25 952.25 Physical Rotterdam 380 CST 3.00 626.25 ↓ 627.75 628.75 630.00 630.75 628.25 626.25 Physical Singapore 380 CST 1.50 655.25 ↓ 651.00 650.75 651.25 652.50 651.25 649.00

Focus of the day: Singapore

Singapore's fuel oil stocks rose by more than 9% last week as onshore residual fuel oil stocks climbed by 1.7 million barrels to a three-week high of 19.605 million barrels. Sources said Western arbitrage inflows for the seven days were strong, at about 570,000mt. And they said arbitrage arrivals were likely to remain heavy through to the end of the month. Observers said expectations of ample supply were putting downward pressure on prices. They predicted that some players would start stockpiling product. The November/December contract was valued at a backwardation of 25 cents/mt by the Asian close, with the contract having flipped into a contango structure, and back into backwardation, twice last week. It added that sentiment in the market was depressed as rising oil prices threatened demand. The bunker market was also reported to be "lackluster". Singapore bunker sales in September fell to a seven-month low, according to figures from the Maritime and Port Authority of Singapore (MPA). Sales stood at around 3.33 million metric tonnes, a 6% fall from the previous month's total of 3.56 million mt. It was the second month in a row that volumes had fallen. However, industry players have stated that they are expecting demand to rebound, especially in South Korea, Japan and China. South Korean utilities are said to already be stockpiling for the peak winter season, with Korea District Heating Corp (KDHC) having secured 31,000 tonnes of low sulphur fuel oil (LSFO) through a tender. In Singapore, the price of 380cst grade rose $2 to $652.50/mt while marine gas oil (MGO) increased a dollar to $975/mt. Demand was below average and supplies were fine. October 21 was the earliest date for bunker deliveries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-Oct 8:30 AM Sep 1.0% 0.9% 1.1% Empire Manufacturing Medium 15-Oct 8:30 AM Sep -2.0 -10.4 -6.2 Business Inventories Medium 15-Oct 10:00 AM Aug 0.5% 0.8% 0.6% Core CPI High 16-Oct 8:30 AM Sep 0.1% 0.1% 0.1% Net Long-Term TIC Flows Medium 16-Oct 9:00 AM Aug NA $67.0B $90.0B Industrial Production Medium 16-Oct 9:15 AM Sep 0.0% -1.2% 0.4% Capacity Utilization Medium 16-Oct 9:15 AM Sep 78.2% 78.2% 78.3% Housing Starts Medium 17-Oct 8:30 AM Sep 765K 750K - Biulding Permits Medium 17-Oct 8:30 AM Sep 815K 803K - Initial Claims Medium 18-Oct 8:30 AM Oct-13 370K 339K - Philadelphia Fed Medium 18-Oct 10:00 AM Sep 0.1% -0.1% - Existing Home Sales Medium 19-Oct 10:00 AM Sep 4.90M 4.82M -

Source:OW Risk Management