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

On Friday crude prices closed sharply higher into the end of the US session. The February WTI contract settled at $95.56/bbl, inching  up marginally by +$0.07 and March Brent at $111.89/bbl, up +$0.79. Crude prices were lifted by the recent Chinese 4th quarter GDP news and also the upward revision of the 2013 global oil demand forecast from International Energy Agency (IEA) based on  optimistic Chinese demand outlook. Other Oil supportive news came from the hostage crisis from Algeria which adds a premium to oil on the overall already high geopolitical risk.  It’s neighboring country Libya is also increasing protection on its oil facilities against militant threats. The ongoing lack of progress between Iran and the Atomic Energy Agency continues to linger in the background and could come to the forefront in the coming weeks. On Friday the US January Michigan consumer sentiment was recorded unexpectedly at a one year low. The US market is closed for the Martin Luther King holiday today. This morning, crude is trading slightly lower.

Fueloil Specifics

The Northwest European bunker fuel oil prices picked up slightly last Friday after trading flat nearly all week. Demand in the main ports was sluggish while Rotterdam and Antwerp reported tight LSFO avails especially for prompt deliveries. The Singapore fuel oil market prices rose by another $8.0 during the morning Platts window last Friday. Market is still currently weak with ample supply. The 380cst cargo premiums softened to a 5 week low. The delivered bunker premiums were around $3.5 above cargo prices last Friday. Bunker fuel oil swaps were up app$3.5/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was slightly weaker, assessed app. $1.5/mt up. This morning both markets area trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q213 Q313 Q413 NYMEX WTI Swap (1st month) 0,07 95,56 ↓ 95,84 96,18 96,44 96,60 96,55 95,43 ICE Brent Swap (1st month) 0,79 111,89 ↓ 111,27 110,33 109,63 109,02 107,07 107,07 ICE Gasoil Swap (1st month) 3,25 955,75 ↑ 957,67 950,58 943,58 939,25 928,36 920,44 3.5% Barges FOB Rtdm 4,50 610,50 ↑ 613,00 611,25 609,75 608,25 603,25 598,25 3.5% Cargoes FOB Med 5,00 611,50 ↑ 608,25 607,00 606,00 604,25 599,25 594,25 1.0% Cargoes FOB NWE 3,00 639,25 ↑ 647,00 645,50 644,25 643,00 637,25 629,25 3% no. 6 USGC WB 0,47 96,75 ↓ 96,50 96,25 95,75 95,25 94,25 93,50 380 CST Cargoes FOB S'pore 7,50 633,50 ↑ 636,25 634,75 633,50 631,50 626,75 622,25 0.1 % GO Barges FOB Rtdm 2,50 956,75 ↑ 958,25 950,25 942,25 936,25 923,25 916,25 Physical Rotterdam 380 CST 4,00 615,00 ↑ 620,25 618,50 617,00 615,50 610,50 605,50 Physical Singapore 380 CST 6,00 637,25 ↑ 643,50 642,00 640,75 638,75 634,00 629,50

Focus of the day: Gibraltar

The week starts under rather severe weather conditions in the Gibraltar Strait. Bunkering operations ex-pipe in Ceuta are ticking over, while no deliveries can be carried out at any of the anchorages of the three ports Algeciras, Ceuta and Gibraltar. Lower demand during last week is somehow making it easy to handle the number of vessels queuing to be supplied in the area, and one floating storage less in the Gibraltar anchorage leaves some more room for ships to anchor there. The weather forecast shows some expected improvement today and tomorrow, but with still certain risk of strong winds on Wednesday which could again affect bunkering operations. Product availability is good at the three ports, even for prompt deliveries but of course subject to weather. CIF Med 3.5% is trading some $14 above FOB Barges Rotterdam and the HILO spread in the Med is currently at $35. 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 22-jan 10:00 AM Dec 5.1M 5.04M - MBA Mortgage Index Medium 23-jan 7:00 AM 19-jan NA 15.2% - Initial Claims Medium 24-jan 8:30 AM 19-jan 365K 335K - Leading Indicators Medium 24-jan 10:00 AM Dec 0.5% -0.2% - New Home Sales Medium 25-jan 10:00 AM Dec 360K 377K -

Source: OW Risk Management