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 the week under pressure after Friday volatility. The June WTI contract settled at $95.17/bbl, down -$0.87 and  Brent  closed at $102.82/bbl, -$1.09 lower. Market remains nervous and directionless. Yesterday, the US April Retail Sales reported an unexpected rise, edging up +0.1% beating market estimates. However, the gasoline component show demand is at a 4 year low. The latest Chinese oil report showed a drop in demand as refineries entered into a period of maintenance; throughput fell by 3% for April. Today IEA rose Oil demand forecast for 2013 800k barrels/day for the first time in 4 months to 90,6 M b/d. This morning, crude is slightly down.

Fueloil Specifics

The Northwest European bunker fuel oil markets started the week with mixed sentiment driven by flat crude oil and tight product avails. Delivered 380cst product both in Rotterdam and Antwerp was assessed app. $1/mt up versus Friday’s close. There were reported higher premiums for prompt deliveries. The Singapore fuel oil markets dropped more than -$9.5 during the Platts window yesterday tracking the crude weakness. The delivered bunker premiums came off to $6.5 above cargo prices as crude softened after the window. Delivered bunker demand was said to be healthy on lower outright prices. This morning both markets are trading slightly down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q313 Q413 2014 NYMEX WTI Swap (1st month) (0,87) 95,17 ↓ 95,31 95,28 94,98 94,95 93,84 90,92 ICE Brent Swap (1st month) (1,09) 102,82 ↓ 102,56 102,35 102,08 102,08 101,26 99,04 ICE Gasoil Swap (1st month) (6,75) 860,75 ↓ 862,83 865,58 868,50 868,39 871,86 864,81 3.5% Barges FOB Rtdm (3,00) 577,50 ↓ 573,50 571,75 570,25 571,25 566,75 562,25 3.5% Cargoes FOB Med (0,50) 568,00 ↓ 566,75 566,00 564,75 563,75 558,25 558,50 1.0% Cargoes FOB NWE 2,00 601,25 ↓ 604,00 605,50 603,50 604,00 598,75 590,00 3% no. 6 USGC WB (2,14) 89,44 ↓ 90,00 89,75 89,50 89,75 89,00 88,25 380 CST Cargoes FOB S'pore (9,75) 598,75 ↓ 596,25 595,00 594,00 594,50 590,75 587,25 0.1 % GO Barges FOB Rtdm 10,50 860,25 ↓ 863,25 866,25 868,25 868,25 872,25 865,25 Physical Rotterdam 380 CST 1,00 587,25 ↓ 578,75 577,50 576,00 576,50 572,00 567,00 Physical Singapore 380 CST (10,00) 606,25 ↓ 603,50 601,75 600,75 600,75 597,00 594,00

Focus of the day: ARA

The slow demand has been continuing its pace. With a market moving more or less sideways on the fuel, nothing spectacular happened. As expected the demand rose briefly before Ascension Day, but nothing unusual there. This is the last week where more notification is needed with Pentecost coming up. Suppliers report to be fully committed relatively early at the moment, it is wise to procure well in advance, in order to secure avails. The low sulphur has shifted a gear up on her Northbound ride. The premium gained an impressive 9 dollars over the last week. The gasoil market seems to gain strength, as far as discounts for DMA concerned. The distillate cracks themselves remain relatively weak, so the flat price is less high than one would expect at the moment. 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 Retail Sales High 13-May 8:30 AM Apr -0.7% -0.4% 0.1% Business Inventories Medium 13-May 10:00 AM Mar 0.4% 0.1% 0.0% Core PPI Medium 15-May 8:30 AM Apr 0.2% 0.2% - Empire Manufacturing Medium 15-May 8:30 AM May 1.0 3.1 - Industrial Production Medium 15-May 9:15 AM Apr -0.5% 0.4% - Initial Claims Medium 16-May 8:30 AM 11-May 335K 323K - Continuing Claims Medium 16-May 8:30 AM 11-May 3015K 3005K - Core CPI High 16-May 8:30 AM Apr 0.2% 0.1% - Housing Starts Medium 16-May 8:30 AM Apr 915K 1036K - Building Permits Medium 16-May 8:30 AM Apr 950K 902K - Philadelphia Fed Medium 16-May 10:00 AM May 2.0 1.3 - Mich Sentiment Medium 17-May 9:55 AM May 79.0 76.4 - Leading Indicators Medium 17-May 10:00 AM Apr 0.3% -0.1% -

Source: OW Risk Management