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 continue to trade sideway as the US government starts a partial shutdown after Republicans and Democrats failed to agree. The market seems unfazed so far- in the belief that a solution will be found in the short term- if we take history as an example (the same battle happened in 1996 under the Clinton presidency). This is not looking good as a more important battle is looming: “How to raise the nation’s debt limit to avoid a default after Oct17?” The US will run out of money to pay all its bills between October 17 -31 unless the Congress increases the Federal’s government borrowing according to the Congressional Budget Office. The November WTI contract fell -$0.54 to settle at $102.33/bbl and Brent slipped -$0.26 to close at $108.37/bbl. Equities closed lower and the US dollar weakened. Today, we will see the US September ISM Manufacturing data. This morning, crude prices are trading around -0,35% down.

Fueloil Specifics

The NWE bunker fuel oil prices fell slightly at the beginning of the week. Delivered 380cst product in Rotterdam and Antwerp lost app. $2/mt and remained supported by tight prompt avails and barge congestions. The Singapore fuel oil markets slipped between -$3.0 to -$1.5 during the Asian Platts window yesterday. Demand recovered slightly as cargo premium flipped to positive. The delivered bunker premiums rose as well and were seen app. $5.0 above cargo prices yesterday. This morning both markets are trading down.

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) (0,54) 102,33 ↓ 101,97 101,42 101,33 98,56 96,02 95,21 ICE Brent Swap (1st month) (0,26) 108,37 ↓ 107,52 106,58 105,78 105,06 104,41 102,09 ICE Gasoil Swap (1st month) (14,25) 913,00 ↓ 910,92 908,75 908,64 898,89 886,56 884,83 3.5% Barges FOB Rtdm (6,25) 590,50 ↓ 585,75 581,50 581,75 578,25 573,00 569,25 3.5% Cargoes FOB Med (5,50) 590,25 ↓ 582,75 576,00 576,50 571,00 565,75 563,00 1.0% Cargoes FOB NWE (5,25) 597,25 ↓ 597,75 599,75 600,00 603,50 599,75 594,25 3% no. 6 USGC WB 0,30 94,05 ↓ 91,80 91,30 91,50 90,55 89,75 89,05 380 CST Cargoes FOB S'pore (1,75) 612,00 ↓ 609,25 604,50 605,50 596,00 591,50 588,75 0.1 % GO Barges FOB Rtdm (13,75) 912,00 ↓ 912,25 910,25 910,25 900,25 888,25 886,25 Physical Rotterdam 380 CST (2,00) 594,00 ↓ 591,00 586,75 587,00 583,00 577,25 573,50 Physical Singapore 380 CST (0,75) 616,00 ↓ 616,50 608,75 609,75 600,25 595,75 593,00

Focus of the day: ARA

Last week showed that premiums for high sulphur are still rising and the backwardation is increasing. More and more suppliers report delays of loading and all are lined up at the same terminal, endangering timely delivery of high sulphur fuel. It is available, also prompt, but it comes with a price. The low sulphur premium is relatively steady around 12-16 dollars. On a short notice there might be an up tic for the premium, as not all cargo traders and refineries have their low sulphur streams online plus some low sulphur cargoes being ‘arbed out’. This should be solved in course of this month. The gasoil market remains at low levels, although suppliers seem to be early committed, hence do not wait till the last moment to procure. Notification periods for the different grades; six days for high sulphur enquiries and five working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Chicago PMI Medium 30-Sep 9:45 AM Sep 52.0 53.0 55.7 ISM Index High 1-Oct 10:00 AM Sep 54.0 55.7 - Construction Spending Medium 1-Oct 10:00 AM Aug 0.3% 0.6% - ADP Employment Change Medium 2-Oct 8:15 AM Sep 180K 176K - Initial Claims Medium 3-Oct 8:30 AM 28-sep 315K 305K - Factory Orders Medium 3-Oct 10:00 AM Aug 0.3% -2.4% - ISM Services High 3-Oct 10:00 AM Sep 58.0 58.6 - Nonfarm Payrolls High 4-Oct 8:30 AM Sep 165K 169K - Unemployment Rate High 4-Oct 8:30 AM Sep 7.3% 7.3% -

Source: OW Risk Management