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 remained below $100/bbl for Brent after the last week’s sell of. Yesterday’s session was rather quiet with thin volume and it ended up in a rather flattish manner. The July WTI futures closed @ $84.29/bbl, up by $0.31/bbl while the July Brent contracts slid down by$0.01/bbl to close at $98.84/bbl. The market sentiments were mixed and energy contracts did not quite share an improvement in the equities and currencies. There were no big news out of the G7 besides the confirmation of rumors that Spain will need an aid for its banks which pressured the EUR. Market seems to be in a wait-and-see mode waiting for more firm news from the European Central Bank (ECB) meeting as well as for the US Federal Reserve Chairman congressional testimony tomorrow. The yesterday’s API inventory report was somehow bearish. The market however awaits the US Energy department data due later today. Their expectations are as follows: Crude -0.5 mbbl, Distillates +0.3 mbbl, Gasoline +0.7 mbbl. This morning, crude is trading higher testing $100/bbl mark on Brent.

Fueloil Specifics

The Singapore fuel oil markets were up only around +$1.75 during the morning Platts window yesterday tracking the crude market. The Asian fuel oil cracks weakened significantly on strong selling pressure despite the stronger crude values. The delivered bunker premiums slipped to around $4.5 above cargo prices. The Northwest European fuel oil markets saw slightly rebounding prices yesterday. However, due to public holiday in UK, there were no Platts publications for the NWE market yesterday. This morning both markets are trading up.

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) 0.31 84.29 ↑ 85.51 85.78 86.01 85.77 86.26 86.26 ICE Brent Swap (1st month) (0.01) 98.84 ↑ 99.07 98.69 98.36 98.71 97.92 97.92 ICE Gasoil Swap (1st month) 5.00 848.00 ↑ 849.67 848.67 848.67 849.00 848.36 844.35 3.5% Barges FOB Rtdm - 564.25 ↑ 563.75 561.25 558.75 561.25 554.00 544.00 3.5% Cargoes FOB Med - 569.50 ↑ 560.00 557.00 554.25 557.00 549.50 539.25 1.0% Cargoes FOB NWE - 657.50 ↑ 597.00 594.75 592.00 594.50 585.25 574.75 3% no. 6 USGC WB (1.50) 88.30 ↑ 88.10 87.80 87.50 86.95 86.30 85.44 380 CST Cargoes FOB S'pore 1.75 579.75 ↑ 590.75 588.00 585.00 588.00 580.25 568.50 0.1 % GO Barges FOB Rtdm - 847.25 ↑ 850.25 849.25 849.25 850.25 847.25 844.25 Physical Rotterdam 380 CST - 572.75 ↑ 574.00 571.50 569.00 571.50 564.25 554.25 Physical Singapore 380 CST 2.00 585.75 ↑ 601.00 598.25 595.25 598.75 591.00 579.25

Focus of the day: Singapore

Singapore's onshore fuel oil stocks climbed for the second week in a row, they rose by almost 8% to 20.35 million barrels, up by 1.46 million barrels. Analysts said the rise came on the back of strong arbitrage from the West. May's fuel oil arbitrage volumes have held at above 4 million mt. June's arbitrage volumes are expected to be lower. The price of intermediate fuel oil (IFO) was generally falling in Asia on Tuesday, although in Singapore it firmed. The price of 380cst material rose $3 to $584.50/mt in the South East Asia hub. Marine gas oil climbed $10.50 to $848.50/mt. Demand was average and avails were not an issue, according to suppliers. June 11 was the earliest date for deliveries.

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% - 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% -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 101.85 86.55 870.85 Next 103.20 88.10 876.50 Strong 103.90 88.35 885.60 Support Brent WTI GO Near 99.45 84.65 852.65 Next 97.55 84.00 843.00 Strong 85.35 81.20 825.00       Markets seem to be consolidating around yesterdays trading range. All contracts we watch had moved above their MA5 putting targets higher to the agenda, those targets are around MA8 and 23.6% Fibo of the last rally down max / min. Brent has them @ 101.85 / 103.20, WTI @ 86.6 / 88.10 and GO @ 870.85 / 876.5. We had some buys from oscillators on all charts we watch so we maintain a positive outlook. EUR/USD was relatively strong yesterday and looks even better today having moved above 1.25, which should be watched. Resistance levels are @ MA5 and the recent lows for all contracts.

Source: OW Risk Management