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 started stronger initially but closed only marginally positive for the start of the week. Market was quiet with thin trading volume as there was a public holiday in the US. There was no settlement for the July WTI contract and it remains trading at $91.15/bbl, +$0.29 while the Brent contract inched up slightly by +$0.28 to close at $107.11/bbl. Crude was supported by the Iranian nuclear issue which apparently saw some setbacks to the progress. Market remains under pressure by the uncertainty surrounding Greece and also Spain, where the Bailout of Bankia, the fourth Bank in the country, increased from €5 Bln to 20 Bln in a couple of days! Today the market is trading slightly higher on rumor of more economic stimulus coming soon from China and possible lowering of lending rate to the banks as early as next month. In terms of data the market focus of the week will be the US Unemployment and more precisely the Non Farm Payroll (new jobs created) at the end of the week.

Fueloil Specifics

The NWE fuel oil market had a slow start of the week as many countries in the area had national holidays. There were very low demand levels with prices both for delivered 380cst and barges were assessed a few dollars higher than Friday. The Singapore fuel oil markets fell more than -$2.0 during the morning Platts window yesterday. Despite the firmer crude values, there are strong selling pressures weakening the fuel oil cracks. The delivered bunker premiums were around $8.25 above cargo prices. Bunker fuel oil swaps posted losses up to $1.25/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was slightly stronger, up by app. 75 cents. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q312 Q412 2013 NYMEX WTI Swap (1st month) - - ↑ 91.80 92.11 92.38 92.34 92.90 92.90 ICE Brent Swap (1st month) 0.28 107.11 ↑ 107.44 107.08 106.66 106.67 105.60 105.60 ICE Gasoil Swap (1st month) 1.75 910.00 ↑ 908.17 906.08 905.58 905.89 906.28 896.15 3.5% Barges FOB Rtdm 1.50 620.75 ↑ 615.25 610.75 607.50 607.50 598.75 582.75 3.5% Cargoes FOB Med 1.25 619.75 ↑ 610.50 606.00 602.75 602.75 594.00 578.00 1.0% Cargoes FOB NWE 5.00 658.50 ↑ 654.25 651.25 648.00 647.75 635.50 618.00 3% no. 6 USGC WB 0.55 96.60 ↑ 96.10 95.65 95.20 93.85 92.75 91.35 380 CST Cargoes FOB S'pore (2.75) 645.75 ↑ 643.50 638.25 635.25 636.00 626.50 609.00 0.1 % GO Barges FOB Rtdm 0.25 910.75 ↑ 908.25 906.25 906.25 906.25 908.25 899.25 Physical Rotterdam 380 CST 2.00 629.00 ↑ 625.50 621.00 617.75 617.75 609.00 593.00 Physical Singapore 380 CST (1.50) 654.50 ↑ 653.75 648.50 645.50 646.75 637.25 619.75

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Confidence Medium 29-May 10:00 AM May 71 69.2 - Initial Claims Medium 31-May 8:30 AM 26-May 365K 370K - GDP High 31-May 8:30 AM Q1 1.9% 2.2% - Chicagp PMI Medium 31-May 9:45 AM May 55.0 56.2 - Nonfarm Payroll Medium 01-Jun 8:30 AM May 175K 115K - Construction Spending Medium 01-Jun 10:00 AM Apr 0.0% 0.1% - Auto Sales Low 01-Jun 2:00 PM May NA 5.0M -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 108.70 92.70 918.75 Next 109.15 92.80 922.35 Strong 109.60 93.20 925.80 Support Brent WTI GO Near 106.75 91.45 910.50 Next 107.25 91.00 909.60 Strong 105.60 90.70 907.95       Energy futures were in line with expectations yesterday, but did nothing conclusive. Brent moved above MA8 this morning, which provides the nearby support@ 107.3 while resistance comes from MA13@ 108.75. The rest of the charts are in line, just levels are different. For WTI they are @ 91.4 and 92.8 respectively. GO has them @ 909.55 and 918.7. Technical picture is pretty similar as well: we have completed divergence and some buy signals on all charts. EUR/USD looks ok trying to gather some momentum above 1.25. All in all we maintain a positive view. We might see some weakness on external factors but do expect the markets to remain relatively firm. Keep in mind the support for Brent @ 104.95, WTI @ 89.85 and GO @ 899.75. They might be buying levels, if we see a slide towards them, though we don't really expect that.

Source: OW Risk Management