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 managed to close with a gain yesterday. The July WTI contracts closed at $85.02/bbl, up by $0.73/bbl while the July Brent futures surged up by $1.80/bbl settling above the $100 mark at $100.64/bbl. Market sentiment has improved on strength in both equities and currencies. Though the ECB had maintained the interest rates and monetary policies, the ECB expressed the commitment to save Spanish banks, which added to a positive market mood. The US weekly crude inventory numbers were somehow bearish both for the crude and products. However, they did not influence the market significantly, but rather just capped the yesterday’s gains. Market will be looking at this week US labor market figure as well as the US Federal Reserve for any hints of possible quantitative easing. The Fed signaled yesterday a downward revision of their US GDP growth forecast. This morning, crude is trading lower.

Fueloil Specifics

The NWE fuel oil prices posted double digit gains yesterday. Delivered 380cst in Rotterdam was up by app$14/mt while cargo prices were slightly weaker, gaining app.$11.5/mt. Product avails in Rotterdam remain tight while Hamburg port reported difficulties with prompt product avails. The Singapore fuel oil markets were up only around +$8.5 during the morning Platts window yesterday tracking the stronger crude. The delivered bunker premiums were higher to more than $6.0 above cargo prices yesterday as the crude strengthen after the window. This morning both markets are trading down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jul Aug Sep Q312 Q412 2013 NYMEX WTI Swap (1st month) 0.73 85.02 ↓ 85.34 85.61 85.87 85.61 86.47 86.47 ICE Brent Swap (1st month) 1.80 100.64 ↓ 99.56 99.15 98.83 99.18 98.39 98.39 ICE Gasoil Swap (1st month) 17.50 865.50 ↓ 853.75 852.67 852.17 852.86 854.08 850.40 3.5% Barges FOB Rtdm - 575.00 ↓ 566.00 563.50 561.00 563.50 556.25 545.50 3.5% Cargoes FOB Med - 585.00 ↓ 562.50 559.25 556.50 559.50 551.75 540.75 1.0% Cargoes FOB NWE - 657.50 ↓ 601.50 598.75 595.75 598.75 589.75 578.25 3% no. 6 USGC WB 2.10 90.40 ↓ 88.59 88.29 87.96 87.33 86.58 85.60 380 CST Cargoes FOB S'pore 9.75 589.50 ↓ 594.25 591.00 588.00 590.75 583.00 570.25 0.1 % GO Barges FOB Rtdm - 864.75 ↓ 854.25 853.25 852.25 854.25 853.25 850.25 Physical Rotterdam 380 CST - 586.25 ↓ 576.25 573.75 571.25 573.75 566.50 555.75 Physical Singapore 380 CST 9.50 594.50 ↓ 604.50 601.25 598.25 601.50 593.75 581.00

Focus of the day: Gibraltar

There is some mild congestion this morning in Gibraltar with some 7 vessels queuing to enter. However the queue is not expected to last long. At the other side of the bay, Algeciras is running smoothly. This is being a rather quiet week in the hub with modest demand due to the holidays, which is expected to pick up before the end of the week. The premiums seen these days are a bit on the high side, along with the volatility of the market, and we have seen the HILO spread narrowing. The Med market is trading down this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Factory Orders Medium 04-Jun 10:00 AM Apr 0.1% -1.9% -0.6% ISM Services Medium 05-Jun 10:00 AM May 53.0 53.5 53.7 Productivity- Rev. Medium 06-Jun 8:30 AM Q1 0.7% -0.5% -0.9% Unit Labor Costs- Rev Medium 06-Jun 8:30 AM Q1 2.3% -2.0% 1.3% Initial Claims Medium 07-Jun 8:30 AM 02-Jun 375K 383K - Consumer Credit Medium 07-Jun 3:00 PM Apr $12.7B $21.4B - Trade Balance Medium 08-Jun 8:30 AM Apr -$49.9B -$51.8B - Wholesale Inventories Medium 08-Jun 10:00 AM Apr 0.5% 0.3% -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 101.05 85.80 865.70 Next 103.20 86.70 873.10 Strong 103.90 87.85 876.50 Support Brent WTI GO Near 99.25 84.20 852.15 Next 99.00 84.00 849.25 Strong 98.40 82.95 848.25       Markets behaved in line with expectations yesterday, though they did not manage to hit targets. All contracts were largely inline; they tested MA8 briefly, but did not manage to break above it. We therefor see the nearest resistance @ MA8 and the support @ MA5 on all charts. Both levels shall be watched. Technical picture remains almost unchanged: indicators are quite low yet and imply some upward potential, though we are not sure whether it will be strong. EUR/USD has improved today, but faced two relatively strong resistance levels: 1.258 and 1.2612. They need to be broken through to support the energy space.

Source: OW Risk Management