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 Crude prices closed sharply lower during the US session. January WTI closed at $87.18/bbl, down -$0.56 and Brent settled at $109.87/bbl, down by -$1.05. Markets were initially supported after the Euro finance leaders and IMF finally agreed to aid Greece in order to secure the release of the latest bailout funds tranche. Market then turned negative as there is still no progress in talks to avoid a US fiscal cliff. The US Weekly Inventory Report from API had a bearish tone with bigger than expected builds across crude and product stockpiles. The more widely watched weekly inventory report from the US Energy department will be released later today and the expectations are as follows: Crude +0.3 mbbl, Distillates -0.2 mbbl, Gasoline +0.9 mbbl. We will look also at the US new homes sales and the Fed Beige book comments. This morning, crude prices are trading lower.

Fueloil Specifics

The Northwest European bunker fuel oil prices edged lower yesterday. Delivered 380cst product in Rotterdam was assessed down by $3/mt while cargo prices were a dollar weaker. There were reported improving buying levels in the area. The Singapore markets were up app.$0.5-1.5 during the Platts window yesterday. The current delivered bunker premiums strengthened slightly to app. $3.0 yesterday above cargo prices as the crude values were stronger after the window. Bunker fuel oil swaps lost up to $5/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was a few dollars stronger. This morning both papers are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Dec Jan Feb Q113 Q213 2013 NYMEX WTI Swap (1st month) (0.56) 87.18 ↓ 87.10 87.73 88.38 88.35 89.79 89.71 ICE Brent Swap (1st month) (1.05) 109.87 ↓ 109.17 108.47 107.96 107.99 106.67 106.06 ICE Gasoil Swap (1st month) (7.75) 940.25 ↓ 938.58 938.33 935.58 935.64 926.19 924.40 3.5% Barges FOB Rtdm (3.75) 584.50 ↓ 583.25 587.25 590.50 590.25 596.00 594.25 3.5% Cargoes FOB Med (6.25) 569.25 ↓ 570.75 578.75 585.25 583.00 590.75 589.25 1.0% Cargoes FOB NWE (6.50) 605.00 ↓ 606.25 611.25 615.00 614.75 621.75 620.00 3% no. 6 USGC WB (1.30) 92.40 ↓ 91.62 91.92 92.19 92.67 92.77 92.50 380 CST Cargoes FOB S'pore 1.50 615.75 ↓ 608.00 610.25 613.50 613.25 619.75 618.00 0.1 % GO Barges FOB Rtdm (7.25) 941.50 ↓ 939.25 938.25 936.25 937.25 927.25 926.25 Physical Rotterdam 380 CST (3.00) 593.00 ↓ 593.50 597.50 600.75 600.50 606.25 604.50 Physical Singapore 380 CST 1.50 619.50 ↓ 618.25 620.50 623.75 624.00 630.50 628.75

Focus of the day: Singapore

Singapore fuel oil stocks were at a four-and-half month high this week. Data showed on-shore inventories rose by 972,000bbl to 22.216mbbl, a 4.5% increase. Arrivals from the West for the week stood at around 653,000mt. Imports from Middle East and India also increased. Fuel oil arbitrage volumes were strong in October and November at over 4 million metric tones, partly due to refinery shutdowns in Europe. The high Western arbitrage volumes combined with relatively weak demand is causing a supply glut. Prospect of heavy arbitrage inflows for the third month in a row in December is helping keep sentiment subdued. December arrivals are expected to be about 5 million mt of product on course to arrive in Asia. The Singapore bunker differential - the price spread between ex-wharf marine fuel prices and fuel oil cargoes - at an eight-month low of $2/mt. Bunker prices were mainly higher in most key Asian ports on Tuesday. The price of intermediate fuel oil (IFO) 380cst in Singapore rose $2.50 to average $614.50/mt. Marine gas oil gained $7.50 to average $949.50/pmt. Earliest deliveries were possible from November 29-30.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Durable Orders High 27-Nov 8:30 AM Oct -0.5% 9.8% 0.0% Case-Shiller 20-city Index Medium 27-Nov 9:00 AM Sep 2.5% 2.0% 3.0% Consumer Confidence High 27-Nov 10:00 AM Nov 73.0 72.2 73.7 New Home Sales Medium 28-Nov 10:00 AM Oct 395K 389K - Initial Claims Medium 29-Nov 8:30 AM 24-Nov 400K 410K - GDP- Second Estimate High 29-Nov 8:30 AM Q3 2.8% 2.0% - Pending Home Sales Medium 29-Nov 10:00 AM Oct 1.0% 0.3% - Personal Income Medium 30-Nov 8:30 AM Oct 0.0% 0.4% - PCE Prices- Core Medium 30-Nov 8:30 AM Oct 0.1% 0.1% - Chicago PMI Medium 30-Nov 9:45 AM Nov 50.0 49.9 -

Source: OW Risk Management