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 Brent Crude Oil closed up at $109.70. WTI, however, moved lower to settle at $97.44, primarily due to surging product inventories as published by the Department of Energy which more than offset the plunge in crude oil inventory. Distillate Inventories, including diesel and heating oil, increased 4.54 million to 118.1 million. They were predicted to rise 1.55 million. Distillate fuel production climbed 3 percent to 5.26 million barrels a day, the highest level since at least 1986, as consumption decreased, but refiners still operated at high capacity. The products look to remain bearish fundamentally and technically. Little activities from the flow side as flat price still moving in range for the past few days.  Yesterday US budget deal increased the odds that the Federal Reserve may speed up plans to taper its monetary stimulus programme. Today’s US jobless claims and Retail sales could give some more insights. Headline this morning looks to be lower Asian shares to a 2-1/2 month low on heightened expectations the FED may act sooner than later to unwind its stimulus at next Wednesday meeting. This morning Brent is slightly down and WTI flat.

Fueloil Specifics

The NWE bunker fuel oil prices rose slightly yesterday. Delivered 380cst product both in Antwerp and Rotterdam was assessed some $2/mt up. Suppliers continuously reported tight avails for prompt deliveries. Premiums varied depending on avails, delivery dates and volumes. In Singapore demand on the delivered front saw no change, trading around 607/mt during Platts MOC process. Ex-wharf 380cst was assessed at 607/mt up 50c from Tuesday. Sources said yesterday, that incremental demand for high sulfur fuel oil in Asia may continue into January on winter buying and stocking up ahead of the Chinese New Year holidays, providing support to the market. The firming market was reflected in the Singapore 180cst fuel oil paper market, which saw the balance Dec/Jan timespread flip to a backwardation Tuesday from a contango of 25c/mt the previous day. LSFO market in Singapore looks still to be well supported by thermal power generation in Taiwan and Japan and this would probably continue into January as well. This morning both markets are trading higher.

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) 1,17 97,44 ↓ 97,62 97,48 97,12 97,41 96,07 94,90 ICE Brent Swap (1st month) (0,01) 109,70 ↑ 109,05 108,88 108,87 108,69 108,28 107,59 ICE Gasoil Swap (1st month) (6,25) 932,00 ↓ 931,83 930,92 928,83 930,53 924,22 922,61 3.5% Barges FOB Rtdm 2,00 576,75 ↑ 582,25 583,50 584,00 583,25 584,25 583,25 3.5% Cargoes FOB Med 6,75 568,25 ↑ 579,50 580,50 580,75 580,25 581,00 580,75 1.0% Cargoes FOB NWE 5,00 610,50 ↑ 606,25 607,75 608,50 607,50 609,25 607,25 3% no. 6 USGC WB 0,25 90,85 ↑ 91,75 91,50 91,50 91,50 91,50 91,25 380 CST Cargoes FOB S'pore 1,50 603,50 ↑ 605,25 604,00 603,50 604,25 603,25 603,25 0.1 % GO Barges FOB Rtdm 3,25 931,25 ↓ 933,25 932,25 930,25 932,25 926,25 924,25 Physical Rotterdam 380 CST 2,00 582,25 ↑ 587,50 588,75 589,25 588,50 589,50 588,50 Physical Singapore 380 CST 0,50 609,00 ↑ 610,50 609,25 608,75 609,50 608,50 608,50

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Medium 10-Dec 10:00 AM Oct 0.3% 0.4% 1.4% Treasury Budget Medium 11-Dec 2:00 PM Nov -$140B -$172.1B -$135.2B Initial Claims High 12-Dec 8:30 AM 07-dec 315K 298K - Continuing Claims High 12-Dec 8:30 AM 30-nov 2750K 2744K - Retail Sales High 12-Dec 8:30 AM Nov 0.6% 0.4% - Business Inventories Medium 12-Dec 10:30 AM Oct 0.3% 0.6% - PPI High 13-Dec 8:30 AM Nov 0.1% 0.1% -

Source: OW Risk Management