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

European crude prices closed the week on a 8 month high while US crude prices fell. This resulted in a widening Brent/WTI spread to more than $15. The January WTI futures fell -$0.60 to close at $95.44/bbl while Brent rose +$0.97 to close at $111.05/bbl. The strength in the European crude price initially was tied to the uncertainty surrounding the Iranian nuclear talks issues. However, towards the end of the trading session, there were appearances of a possible deal as John Kerry from the US was heading towards Geneva late Friday to attend the talks. Generally, Brent prices are affected by the geopolitical tensions in the Middle East and Nigeria while the weaker fundamentals in the US continue to weigh down US crude prices. Analysts see a limited impact on Oil supply from the Iran agreement, at least the next six months, as sanctions on banking and Crude remain in place. Today, we will see the US October Pending home sales figures. This morning, crude prices are trading heavily lower, around-2%, after the US Iran agreement.

Fueloil Specifics

The Northwest European bunker fuel oil prices closed slightly higher last Friday. Delivered 380cst product both in Rotterdam and Antwerp was assessed app.$3/mt higher vs previous close. Suppliers reported a busy day with increased demand and continuously tight product avails. Loading delays were said to continue for the next three- four days. The Singapore fuel oil market managed to rise around +$2.0 during the Asian Platts window last Friday. The delivered bunker premiums continued to soften and were seen at app.$6.0 above cargo prices amidst a slower demand. Bunker fuel oil swaps gained some $3.5/mt at the front of the forward curve both for Rotterdam and Singapore papers. The backend was significantly stronger, assessed nearly $6/mt up for Cal14 papers. Visco spreads remain on the low side at the front with spot closing at $3.59/mt last Friday. December is trading at app. $5.0 while forward prices remain stable trading at app. $7.0/mt for cal14. This morning both markets are trading significantly lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Dec Jan Feb Q114 Q214 2014 NYMEX WTI Swap (1st month) (0,60) 94,84 ↓ 93,53 93,80 93,87 93,87 93,47 92,67 ICE Brent Swap (1st month) 0,97 111,05 ↓ 108,57 108,10 107,77 107,48 106,86 105,81 ICE Gasoil Swap (1st month) 14,50 937,75 ↓ 925,75 924,75 922,75 922,50 912,75 909,74 3.5% Barges FOB Rtdm 3,75 578,00 ↓ 571,00 574,25 574,75 574,75 575,25 574,00 3.5% Cargoes FOB Med 2,75 588,00 ↓ 567,75 570,50 570,50 570,00 570,50 570,25 1.0% Cargoes FOB NWE 4,25 602,50 ↓ 598,50 600,00 600,25 600,25 601,00 598,75 3% no. 6 USGC WB (0,13) 90,72 ↓ 90,25 90,00 90,00 90,00 90,00 90,00 380 CST Cargoes FOB S'pore 2,25 606,25 ↓ 599,50 595,00 594,00 593,50 592,75 594,00 0.1 % GO Barges FOB Rtdm 14,25 936,25 ↓ 927,25 926,25 924,25 924,25 916,25 913,25 Physical Rotterdam 380 CST 3,00 583,75 ↓ 576,25 579,50 580,00 580,00 580,50 579,25 Physical Singapore 380 CST 2,00 613,50 ↓ 603,50 599,75 599,25 599,25 599,00 599,25

Focus of the day: Gibraltar

Deliveries at the Gibraltar Strait are running smoothly this morning with the three ports serving within schedule. Some suppliers are struggling with lack of product available for this week; therefore prompt requirements are difficult to accommodate which is causing higher premiums than those seen last week in the hub. The NWE – Med spread remains at its annual maximums due to the lack of product in the Med, with CIF Med 3.5% trading some 22 usd/mt above FOB Barges Rotterdam. The HILO is narrowing from last week to some 20 usd/mt in the Med, with the CIF Med 1% premium over FOB NWE 1% at 17 usd/mt. The Med market is trading down this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Pending Home Sales Medium 25-Nov 10:00 AM Oct 1.0% -5.6% - Housing Starts Medium 26-Nov 8:30 AM Oct 915K NA - Building Permits Medium 26-Nov 8:30 AM Oct 930K NA - Case-Shiller 20- city Index Medium 26-Nov 9:00 AM Sep 13.0% 12.8% - Consumer Confidence High 26-Nov 10:00 AM Nov 74.0 71.2 - Initial Claims Medium 27-Nov 8:30 AM 23-nov 335K 323K - Durable Orders High 27-Nov 8:30 AM Oct -3.0% 3.8% - Chicago PMI Medium 27-Nov 9:45 AM Nov 58.0 65.9 - Michigan Sentiment- Final Medium 27-Nov 9:55 AM Nov 73.5 72.0 - Leading Indicators Medium 27-Nov 10:00 AM Oct -0.1% 0.7% -

Source: OW Risk Management