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

Yesterday there was some strength in the Brent contract boosted by Libyan supply flow disruption. Libyan oil exporting ports are still closed as negotiations with the tribal leaders remain unsuccessful. European economic data were also supportive with a solid German manufacturing figure at 54, 2. The US November Industrial production rose 1.1% against 0.6% forecasted which boosted the prospect of better energy demand forward. The January WTI futures rose by +$0.88 to $97.48/bbl and January Brent expired at $110.47/bbl, gaining +$1.64 yesterday. The next most active February Brent contract settled at $109.41/bbl. The API weekly Inventories will be published later today and speculation is that Distillate and Gasoline inventories increased last week. Market is focusing on the FOMC meeting starting today with the outcome tomorrow. Today, in terms of economic data, we will have the US November CPI. This morning, crude prices are trading around -0,35% lower.

Fueloil Specifics

The NWE bunker fuel oil prices surged higher yesterday following general market trend. Delivered 380cst product in Rotterdam and Antwerp was assessed nearly $11/mt higher versus previous day close. Prices in the area were also supported by tight product avails. The majority of suppliers were able to quote from December 20 onwards. The Singapore fuel oil markets rose more than $5.5 during the Asian Platts window yesterday. The delivered bunker premiums softened to range around +$4.0 to +$5.0 above cargo prices. Bunker demand is said to be slow and continues to weigh down the market. This morning both markets are trading down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jan Feb Mar Q114 Q214 2014 NYMEX WTI Swap (1st month) 0,88 97,48 ↓ 97,52 97,31 96,79 97,20 95,54 94,38 ICE Brent Swap (1st month) - 109,41 ↓ 108,71 108,45 108,20 107,92 107,60 106,78 ICE Gasoil Swap (1st month) 13,75 931,50 ↓ 923,08 921,75 920,08 921,64 915,94 914,42 3.5% Barges FOB Rtdm 6,25 580,25 ↓ 582,25 583,00 583,00 582,75 582,75 581,50 3.5% Cargoes FOB Med 2,75 574,25 ↓ 580,50 581,00 581,00 580,75 580,50 579,75 1.0% Cargoes FOB NWE 3,00 604,75 ↓ 601,00 604,00 604,75 603,25 605,75 603,75 3% no. 6 USGC WB 0,78 92,38 ↓ 91,30 91,30 91,30 91,30 91,05 91,05 380 CST Cargoes FOB S'pore 6,00 608,75 ↓ 607,75 605,00 603,25 605,00 602,75 602,25 0.1 % GO Barges FOB Rtdm 11,75 930,75 ↓ 924,25 923,25 921,25 923,25 918,25 916,25 Physical Rotterdam 380 CST 10,00 586,00 ↓ 587,50 588,25 588,25 588,00 588,00 586,75 Physical Singapore 380 CST 5,50 612,00 ↓ 613,00 610,25 608,50 610,25 608,00 607,50

Focus of the day: ARA

As the year is coming to an end, you see that demand is getting more clustered as everybody wants to have their supplies ordered before Christmas. This means that the suppliers are showing an unusual early commitment on most of the products. The high sulphur fuel prices have hovered in a not too worrying 2% volatility range. Avails are not too bad for high sulphur, though one needs to pay a premium to have it on board. This week is expected to be busy, so buy early! The official premium of low sulphur has come down to a healthy 26 dollars. However the bitter reality is that delivered prices are in a different zip code. Premiums of over 15 dollars are not rare to have it delivered on board. And that still does not provide certainty of actually delivery… Waiting time at low sulphur terminals is exceptionally long; 12 days and over has been reported. This shows the threat of the trading pool in Rotterdam. Majors fail to perform on their contracts at the moment and suppliers still need to lift their November volume. No relief before New Year’s Eve as it looks now. Gasoil will end the year with a bang, being cheaper than ever. Enjoy it while it lasts. Be aware that suppliers will charge a holiday fee between USD 1500 and USD 2500 per barge per delivery between December 24th 16.00 and December 27th 08.00 as well as between December 31st 16.00 and January 2nd 08.00. Notification periods for the different grades; five days for high sulphur enquiries and seven working days for low sulphur enquiries. That leaves only to wish you a Merry Christmas and Happy New Year from ARA area. See you all on the flip side!

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire Manufacturing Medium 16-Dec 8:30 AM Dec 5.0 -2.2 1.0 Industrial Production Medium 16-Dec 9:15 AM Nov 0.4% -0.1% 1.1% Core CPI High 17-Dec 8:30 AM Nov 0.1% 0.1% - Housing Starts Medium 18-Dec 8:30 AM Nov 2750K 2744K - Building Permits Medium 18-Dec 8:30 AM Nov 975K 1034K - FOMC Rate Decision High 18-Dec 2:00 PM Dec 0.25% 0.25% - Initial Claims Medium 19-Dec 8:30 AM 14-dec 335K 368K - Existing Home Sales Medium 19-Dec 10:00 AM Nov 4.98M 5.12M - Philadelphia Fed Medium 19-Dec 10:00 AM Dec 4.0 6.5 - Leading Indicators Medium 19-Dec 10:00 AM Nov 0.7% 0.2% - GDP (Annualized) High 20-Dec 8:30 AM Q3 3.6% 3.6% -

Source: OW Risk Management