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 future contracts pushed lower in the beginning of Monday’s trading session. The yesterday’s US factory orders sales showed a drop of -0.6% against exp. -0.3%, and this added to the already bearish sentiment. However, the market feels an increasing possibility of some sort of momentary easing policies that might be coming. The market participants expect Eurozone leaders to take some decisive actions to sort out the prevailing debt issues plaguing Greece and Spain at the ECB meeting this week. The US Federal Chairman will also be giving his congressional testimony speech on this coming Thursday. The Euros saw rebounds which aided the crude prices move accordingly as well. As a result of this change in the market mood crude contracts rebounded a little and closed positively. The July WTI closed at $83.98/bbl up by $0.75 while the July Brent contracts rose by $0.42 to close at $98.85/bbl. The ISM Manufacturing data will be released later today. Market mood is less positive this morning, and crude is trading down.

Fueloil Specifics

The Singapore fuel oil markets crashed more than -$28.0 during the morning Platts window on the start of the week. Market saw more selling interest that placed pressure on the Asian fuel oil cracks. The delivered bunker premiums were seen at around $6.0 above cargo prices yesterday. The Northwest European fuel oil market started the week with significant falls. However, due to public holiday in UK, there were no Platts publications for the NWE market yesterday. This morning both markets are trading 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) 0.75 83.98 ↓ 83.82 84.10 84.34 84.32 85.24 85.24 ICE Brent Swap (1st month) 0.42 98.85 ↓ 97.81 97.36 97.03 97.05 96.59 96.59 ICE Gasoil Swap (1st month) (4.75) 843.00 ↑ 841.33 838.75 838.08 838.28 838.67 838.08 3.5% Barges FOB Rtdm - 563.50 ↓ 555.00 551.00 548.50 548.50 541.25 531.25 3.5% Cargoes FOB Med - 569.25 ↓ 552.75 547.25 544.25 544.25 536.75 526.50 1.0% Cargoes FOB NWE - 657.50 ↓ 586.25 584.25 582.00 581.75 572.50 562.00 3% no. 6 USGC WB (1.50) 87.35 ↓ 86.59 86.14 85.84 84.99 84.34 83.55 380 CST Cargoes FOB S'pore - 577.25 ↓ 581.25 578.00 575.00 575.25 567.50 555.75 0.1 % GO Barges FOB Rtdm - 848.00 ↑ 841.25 839.25 838.25 839.25 838.25 838.25 Physical Rotterdam 380 CST - 572.75 ↓ 565.25 561.25 558.75 558.75 551.50 541.50 Physical Singapore 380 CST (28.50) 583.75 ↓ 591.50 588.25 585.25 586.00 578.25 566.50

Focus of the day: ARA

Once more the market has been heavily affected by the overall oil market dropping even below $100/bbl on Brent in the past days. Fuel came down to levels even around $ 550/mt, delivered prices very close to that level as well. With a current HILO spread around $40/45, 1% 380cst in ARA also broke the $600/mt mark during yesterdays trading hours. Whereas high sulphur avails currently seem to be on a normal level we recommend buyers of low sulphur fuel to give enough notice to secure the product for all ARA ports.

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 - Productivity- Rev. Medium 06-Jun 8:30 AM Q1 0.7% -0.5% - Unit Labor Costs- Rev Medium 06-Jun 8:30 AM Q1 2.3% -2.0% - 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% -

Source: OW Risk Management