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 promisingly, trading on a firm note before succumbing to pressure from a weaker than expected 4th quarter German GDP which showed a contraction at -0.5%. Market stays also under pressure with the continued political fighting over the US debt ceiling debate. The US equities were mostly lower during the Asian and European morning session but were spurred by better than expected US December Retail sales figures, up +0.5%. The API US inventory reported surprising crude built and a distillate draw but a big gasoline built above 4 Mios bbl. The February WTI contract settled at $93.28/bbl, down $0.86 and Brent closed at $110.30/bbl, down $1.58. Today, watch for the December US Industrial Report. The US Energy Department of Energy will release its weekly stocks numbers and expectations are as follows: Crude +2.3 , Distillates +1.9, Gasoline +2.9. This morning, crude is trading mixed with Brent up 0,1% and WTI slightly down.

Fueloil Specifics

The NWE fuel oil markets closed slightly lower yesterday. Demand for bunker fuel in the main ports remained subdued and Rotterdam continues to report congestions and tight product avails for prompt deliveries. Antwerp reported improved avails. The Singapore fuel oil market prices rose more than $2.0 during the Platts window yesterday. Market fundamentals remain weak with soft demand and ample supply. The delivered bunker premiums were around $4.5 above cargo prices. Bunker fuel oil swaps closed yesterday without major changed loosing a few cents along the curve both for Rotterdam and Singapore papers. This morning both markets are trading down.

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) (0,86) 93,28 ↓ 93,82 94,18 94,48 94,61 94,54 93,67 ICE Brent Swap (1st month) (1,58) 110,30 ↑ 109,43 108,73 108,13 107,57 105,83 106,80 ICE Gasoil Swap (1st month) (4,75) 960,75 ↓ 950,58 941,92 934,17 928,53 918,00 924,06 3.5% Barges FOB Rtdm 0,25 603,25 ↓ 599,00 598,00 597,00 596,00 592,50 594,00 3.5% Cargoes FOB Med (1,50) 601,75 ↓ 594,00 593,00 592,00 591,25 587,75 589,50 1.0% Cargoes FOB NWE (5,00) 632,75 ↓ 635,50 634,75 634,00 632,75 628,25 629,00 3% no. 6 USGC WB (1,21) 94,47 ↑ 94,45 94,45 93,95 93,45 92,70 93,20 380 CST Cargoes FOB S'pore 2,25 630,50 ↓ 624,75 623,25 621,75 620,50 616,75 610,25 0.1 % GO Barges FOB Rtdm 6,50 961,00 ↓ 951,25 942,25 934,25 930,25 917,25 924,25 Physical Rotterdam 380 CST (1,00) 609,25 ↓ 606,25 605,25 604,25 603,25 599,75 601,25 Physical Singapore 380 CST 2,00 635,25 ↓ 632,00 630,50 629,00 627,75 624,00 617,50

Focus of the day: Singapore

Singapore onshore fuel oil stocks have fallen close to a four-and-a-half month low last week. The fall came despite strong arbitrage arrivals from the West and relatively weak demand from the bunker sector. According to traders in the market, the decline in stocks could partly be due to players storing product offshore. In detail, Singapore's onshore residual fuel oil stocks fell by 1.044 mbbl to 17.775 million. Other factors in the decline included higher demand from South Korea as colder temperatures called for more output from power stations and strengthening demand from China's independent 'teapot' refiners. Imports from the West totalled some 1.24 million mt. Arbitrage volumes for the whole January are expected to be 5.6 million mt. Reports say oil major BP and Swiss trader Gunvor Group have been giving up fuel oil storage space at Singapore's Universal Terminal. They said the downturn in the global shipping industry had made leasing tankers a cheaper way of holding product. Meanwhile, bunker prices across all key Asian ports showed a mixed picture this Tuesday. In Singapore, 380cst bunker fuel dipped $0.50 to close at $632.50/mt. Marine gas oil climbed $3.50 to close at $945/mt, resuming its upward trend from January 10. A majority of traders reported below-average demand, with adequate supplies in stock. Earliest estimated delivery dates were January 17-23, depending on the supplier.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-jan 8:30 AM Dec 0.4% 0.3% 0.5% Core PPI High 15-jan 8:30 AM Dec 0.1% 0.1% 0.3% Empire Manufacturing Medium 15-jan 8:30 AM Jan 0.0 -8.1 -7.8 MBA Mortgage Index Medium 16-jan 7:00 AM 12-jan NA 11.7% - Core CPI High 16-jan 8:30 AM Dec 0.1% 0.1% - Industrial Production Medium 16-jan 9:15 AM Dec 0.1% 1.1% - Initial Claims Medium 17-jan 8:30 AM 12-jan 375K 371K - Housing Starts Medium 17-jan 8:30 AM Dec 880K 861K - Building Permits Medium 17-jan 8:30 AM Dec 880K 899K - Philadelphia Fed Medium 17-jan 10:00 AM Jan 1.0 4.6 - Mich Sentiment High 18-jan 9:55 AM Jan 76.0 72.9 -

Source: OW Risk Management