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

It was a big favor from the Federal Reserve to Investors after they decided to continue to pump money into the US Bond Market at an unchanged massive pace of $85bn-per-month. This decision has taken the market by surprise as most expected some form of tightening even of a small scale. Market reaction has been strong: equities across Asia jumped higher and so did all commodities while the US dollar plunged and bond yields fell.  The October WTI futures rose $2.65 to close at $108.07/bbl and November Brent surged $2.41 to $110.60/bbl. The Fed also revised down its 2013 economic growth projection to 2.0% from 2.3% and even sharper for 2014. This to their view provides a good reason to maintain the current stimulus measures. Before the Fed meeting, crude prices had received an early boost by the bullish US inventory report. Crude Oil and product stockpiles saw larger than expected draws with -4.37 mbbl for Crude Oil while distillates and gasoline both draw more than -1.0 mbbl. Today, we will see the usual weekly US jobless claims, Existing Home Sales and Philadelphia Fed to provide more economic guidance. This morning, crude prices are trading up.

Fueloil Specifics

The Northwest European bunker fuel oil markets reported higher prices and mixed demand yesterday. Delivered 380cst product in Rotterdam and Antwerp was assessed some $3/mt higher vs. previous days close. Avails remain tight especially for prompt deliveries with some suppliers in Rotterdam able to quote only for the next week and onwards. The Singapore fuel oil markets extended losses by around -$5.0 during the Asian Platts window yesterday. The delivered bunker premiums were seen app.$2.5 above cargo prices as buying interest increased on lower outright prices. This morning both markets are trading significantly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Oct Nov Q413 Q114 Q214 2014 NYMEX WTI Swap (1st month) 2,65 108,07 ↑ 107,25 105,80 105,80 101,63 98,49 97,47 ICE Brent Swap (1st month) 2,41 110,60 ↑ 110,35 109,52 108,75 108,02 107,34 104,58 ICE Gasoil Swap (1st month) (1,50) 924,25 ↑ 936,75 933,92 933,92 922,03 907,06 905,58 3.5% Barges FOB Rtdm 1,75 589,50 ↑ 597,25 595,50 595,50 595,00 590,25 586,50 3.5% Cargoes FOB Med 3,50 593,75 ↑ 593,50 590,00 590,00 589,25 584,00 581,25 1.0% Cargoes FOB NWE (2,50) 609,00 ↑ 618,75 620,50 620,25 622,25 617,50 612,25 3% no. 6 USGC WB 1,97 95,94 ↑ 93,60 93,35 93,10 92,85 92,30 91,35 380 CST Cargoes FOB S'pore (4,75) 595,75 ↑ 612,75 611,75 610,75 609,25 607,00 604,75 0.1 % GO Barges FOB Rtdm (1,50) 922,50 ↑ 938,25 935,25 935,25 923,25 909,25 907,25 Physical Rotterdam 380 CST 3,00 593,75 ↑ 602,50 600,75 600,75 599,75 594,50 590,75 Physical Singapore 380 CST (3,50) 598,00 ↑ 618,00 617,00 617,00 615,25 612,25 610,00

Focus of the day: Houston

The fuel oil has been very strong during the last days, even Brent has been dropping, USG3% has not been following. High sulfur fuel oil on the Atlantic Coast picked up against the Gulf Coast, on indications from the market that a key Canadian refinery was putting out less 3%S fuel oil. In Houston, IFO380 was assessed $11.50 higher to $620.50/mt. The spreads have opened significantly in the last three weeks (both in the US Gulf Coast and Panama). Almost all suppliers have actually been struggling big time in the first half of the year so this is in some way a relief as they should be making some money now. The tight availability in the US Gulf also helps pushing up the premiums. In New Orleans, supplies were stable with firm demand. Based on price indications and higher Brent, IFO380 was assessed at $623.50/mtw, up $11.50.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire Manufacturing Medium 16-Sep 8:30 AM Sep 7.0 8.6 6.3 Industrial Production Medium 16-Sep 9:15 AM Aug 0.2% 0.0% 0.4% Core CPI High 17-Sep 8:30 AM Aug 0.2% 0.2% 0.1% NAHB Housing Market Index Medium 17-Sep 10:00 AM Sep 58 59 58 Housing Starts Medium 18-Sep 8:30 AM Aug 900K 896K 891K FOMC Rate Decision High 18-Sep 2:00 PM Sep 0.25% 0.25% 0,25% Initial Claims Medium 19-Sep 8:30 AM 14-sep 335K 292K - Existing Home Sales Medium 19-Sep 10:00 AM Aug 5.00M 5.39M - Philadelphia Fed Medium 19-Sep 10:00 AM Sep 8.0 9.3 - Leading Indicators Medium 19-Sep 10:00 AM Aug 0.5% 0.6% -

Source: OW Risk Management