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 rebounded more than $1.5/bbl yesterday erasing the previous day decline. The July WTI contract closed at $93.45, up +$1.48 and Brent settled at $102.06/bbl, up +$1.67. The market was lifted by a temporary disruption to North Sea crude oil production and a weaker US dollar. The market is also in a dilemma as weak economic data might be interpreted as positive for commodities and stocks as the US Federal Reserve may extend their stimulus program-contrary to what was said lately- to help to sustain the economic recovery. The recent manufacturing data from China, Eurozone continue to be experience  a slowdown which will likely impact the oil demand. Today, we will see the US April Trade balance data. This morning, crude is trading around -0,30% down.

Fueloil Specifics

The NWE bunker fuel oil markets reported slightly increasing demand on rising fuel prices yesterday. Delivered 380cst product in Rotterdam and Antwerp was assessed app.$5/mt up versus Friday’s close. Avails in Rotterdam improved a bit with a more than one supplier able to offer prompt product. In Antwerp suppliers yesterday were quoting from today and onwards. The Singapore fuel oil markets lost between -$4.25 to flat during the Asian Platts window on the start of a new trading month. The market saw a strong support in the 180cst demand which lifted values above the 380cst. With the strong incoming amount of products, market is still expected to see ample supply amidst a softer bunker demand outlook.  The delivered bunker premiums lifted to around +$9.0 above cargoes prices pulled higher by terminal congestion. This morning both markets are trading slightly lower.

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) 1,48 93,45 ↓ 93,02 93,19 93,19 93,14 92,26 89,95 ICE Brent Swap (1st month) 1,67 102,06 ↓ 101,63 101,29 100,90 100,91 99,92 97,89 ICE Gasoil Swap (1st month) 9,50 854,25 ↓ 853,58 854,83 857,00 857,14 862,64 856,67 3.5% Barges FOB Rtdm 4,50 575,00 ↓ 574,25 571,25 569,00 570,00 563,00 556,00 3.5% Cargoes FOB Med 5,75 570,75 ↓ 569,25 566,50 564,25 565,25 557,25 552,50 1.0% Cargoes FOB NWE 5,50 600,00 ↓ 601,00 602,75 600,75 601,25 595,00 585,75 3% no. 6 USGC WB 1,22 90,15 ↓ 90,00 89,75 89,50 89,50 88,50 87,80 380 CST Cargoes FOB S'pore (4,25) 591,25 ↓ 597,25 595,75 592,75 593,25 588,75 582,50 0.1 % GO Barges FOB Rtdm 11,00 856,75 ↓ 854,25 855,25 857,25 857,25 861,25 855,25 Physical Rotterdam 380 CST 4,00 580,25 ↓ 579,50 577,00 574,75 575,25 569,25 563,75 Physical Singapore 380 CST (2,00) 600,50 ↓ 604,50 602,50 599,50 599,50 595,00 591,25

Focus of the day: ARA

The new month started off with fuel oil being very unimpressed by the volatility of the crude. The crack firmed as easily as the crude dropped. Implying that tight avails and loading problems remain today’s news. The only old news is that we prolong our advice of buying well in advance. The low sulphur just rode the high sulphur fuel wave, without any notable premium deviations. The gasoil market seems to have hit boiling point last week and is now looking for softer discounts. Although it is still far from the old levels.  Notification periods for the different grades; six days for high sulphur enquiries and four working days for low sulphur enquiries, two working days for gasoil enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual ISM Index High 3-Jun 10:00 AM May 49.5 50.7 49.0 Construction Spending Medium 3-Jun 10:00 AM Apr 0.5% -1.7% 0.4% Trade Balance Medium 4-Jun 8:30 AM Apr -$41.0B -$38.8B - ADP Employment Change Medium 5-Jun 8:15 AM May 140K 119K - Productivity- Rev. Medium 5-Jun 8:30 AM Q1 0.9% 0.7% - Factory Orders Medium 5-Jun 10:00 AM Apr 1.5% -4.9% - ISM Services Medium 5-Jun 10:00 AM May 52.5 53.1 - Initial Claims Medium 6-Jun 8:30 AM 1-June NA 347K - Nonfarm Payrolls High 7-Jun 8:30 AM May 170K 165K - Unemployment Rate High 7-Jun 8:30 AM May 7.5% 7.5% - Consumer Credit Medium 7-Jun 3:00 PM Apr $10.0B $8.0B -

Source: OW Risk Management