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

A weakening sentiment brought oil prices down sharply in recent days, with sovereign debt crisis as the central element and fears of contagion to other South European countries. Rumors that President Obama is seeking the G8 cooperation for an oil stock release is a further depressing factor, although-if it happens- it should be only temporarily judging by last time effects. As refineries come out of maintenance, the seasonal swing up in crude demand is about to start. OPEC output is already at record levels, with limited spare capacity as a result. In short, the combination of a pick up in demand and the fatigue in non-OPEC supply should help to absorb the SPR release of a similar amount to last year relatively easily. It could temper the extent of the stock draw in Q3 at best, should OPEC manage to continue pumping over 31 mb/d but would still struggle to create a surplus at the margin of the market. No major economic data is scheduled today and crude is trading further down this morning.

Fueloil Specifics

The NWE bunker fuel oil prices tumbled down yesterday following weakening crude. Both delivered 380cst product and cargo prices lost more than $12/mt. There were reported very low demand levels as many players in the Northwest Europe were away for national holidays. Asia's fuel oil market extended gains on Thursday, supported by firm demand and declining supplies in the region. Activity in the bunker market picked up on Thursday, with demand being propped up by falling outright prices, industry sources said. Singapore onshore fuel oil stocks fell by 1.5 million barrels to around 18.4 million barrels, lowest in four weeks. Yesterday delivered bunker 380cst in Singapore was seen between 645-655/mt. This morning both markets are trading further down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q312 Q412 2013 NYMEX WTI Swap (1st month) (0.25) 92.56 ↓ 92.96 93.20 93.43 93.43 93.99 93.99 ICE Brent Swap (1st month) (4.22) 107.49 ↓ 106.70 106.18 105.65 105.68 104.52 104.52 ICE Gasoil Swap (1st month) (13.00) 918.50 ↓ 904.75 903.33 903.17 903.25 902.75 889.94 3.5% Barges FOB Rtdm (12.50) 620.50 ↓ 610.75 607.75 605.00 605.75 598.00 582.00 3.5% Cargoes FOB Med (10.25) 626.25 ↓ 607.25 604.00 601.00 601.75 593.75 577.50 1.0% Cargoes FOB NWE (12.50) 658.50 ↓ 647.25 645.00 642.25 643.00 632.75 616.00 3% no. 6 USGC WB (2.12) 95.58 ↓ 95.93 95.63 95.33 94.33 93.33 91.79 380 CST Cargoes FOB S'pore (1.75) 663.50 ↓ 640.25 636.25 632.50 633.50 624.25 606.75 0.1 % GO Barges FOB Rtdm (14.75) 922.00 ↓ 904.25 903.25 903.25 903.25 904.25 893.25 Physical Rotterdam 380 CST (12.00) 629.25 ↓ 621.00 618.00 615.25 616.00 608.25 592.25 Physical Singapore 380 CST (1.50) 669.50 ↓ 650.50 646.50 642.75 644.25 635.00 617.50

Focus of the day: Piraeus

Piraeus was rather quiet this week. Crude was dropping throughout the week and CIF MED 3.5% reached yesterday evening its lowest since the beginning of the year. Political instability in Greece has numbed the market and the number of enquiries in the port was lower than expected, while cruiser vessels accounted for the biggest part of the volume enquired. As a result of the low volume, barge availability is good, even for prompt enquiries. MOH refinery will undergo an export during the weekend and all loadings have already been scheduled around it, in order to avoid congestion. The weather is rough at the moment, but supplies are being carried out normally and improvement is expected over the weekend.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-May 8:30 AM Apr 0.2% 0.8% 0.1% CPI High 15-May 8:30 AM Apr 0.2% 0.2% 0.2% Empire Manufacturing Medium 15-May 8:30 AM May 8.4 6.6 17.1 Business Inventories Medium 15-May 10:00 AM Mar 0.3% 0.6% 0.3% Housing Starts Medium 16-May 8:30 AM Apr 680K 654K 717K Building Permits Medium 16-May 8:30 AM Apr 730K 747K 715K Industrial Production Medium 16-May 9:15 AM Apr 0.5% 0.0% 1.1% Initial Claims Medium 17-May 8:30 AM 12-May 365K 367K 370K Philadelphia Fed Medium 17-May 10:00 AM May 8.8 8.5 -5.8 Leading Indicators Medium 17-May 10:00 AM Apr 0.2% 0.3% -0.1%

OW Risk Management   OW Risk Management (OW RMS) is the risk management arm of OW Bunker Group, one of the world’s leading suppliers of marine fuels and lubricants. OW RMS is pricing the derivatives traded by the OW Bunker Group with approximate volume of 40 million metric tonnes per year. OW RMS offers to shipping companies, local suppliers and other counterparts a wide range of risk management products and tools.   We are experts in fuel and gasoil trading both as physically delivered products and derivatives. Based on our long experience in risk management and shipping we together with our clients devise a hedging strategy that is right for them. RMS can offer a tailored solution individually to our clients by using a number of hedging tools. In that way we meet the demand of the customers with various risk profiles.

Source: OW Risk Management