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 traded up at the start but turned down aggressively towards the European close.Market was boosted by comments on possible China economic stimulus in the coming months but faded quickly with renewed concerns over Eurozone and particularly Spain. The Spanish 10 year Bond yield is trading at record high. The Euros weakened to a 2 year record low against the US dollar below 1,25. Energy demand forecast are increasingly dampened by the fragile economic developments. Market were also disappointed that the Chinese has no more precise plans for a large scale stimulus growth package. The July WTI closed marginally lower by -$0.10 at $90.76/bbl while Brent was down -$0.43 at $106.68/bbl. Today we will have the API data and the US DOE Weekly Inventory will only be released tomorrow due to the public holiday on Monday. This morning, crude is almost a dollar down as Spain becomes the focus of Eurozone.

Fueloil Specifics

Rotterdam 380 cst delivered fuel prices lost a couple of dollars yesterday. Cargo prices were little stronger having closed almost unchanged compared to the previous session. They are supported by on-going arbitrage of cargo volumes to other markets which resulted in relatively tight avails in the NWE while demand has improved slightly. The Singapore fuel oil markets fell by $1.0 to 1.5/mt during the Platts window yesterday. The market continues to see strong selling interest, which has further widen the fuel oil cracks. The delivered bunker premiums slipped to around $6.0 to $7.0 above cargo prices yesterday. Bunker fuel swaps gained few cents both in Rotterdam and Singapore yesterday lifting the whole curve slightly higher. However, both markets trade down this morning pricing in an overnight weakness of the crude futures.

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) (0.10) 90.76 ↓ 89.88 90.15 90.40 90.41 91.23 91.23 ICE Brent Swap (1st month) (0.43) 106.68 ↓ 105.36 104.97 104.47 104.50 103.51 103.51 ICE Gasoil Swap (1st month) 1.00 911.00 ↓ 892.50 889.67 889.67 889.78 890.25 880.24 3.5% Barges FOB Rtdm (0.25) 620.25 ↓ 606.00 601.50 598.25 598.25 589.25 573.75 3.5% Cargoes FOB Med (0.25) 619.75 ↓ 603.00 597.25 593.75 593.75 584.50 569.00 1.0% Cargoes FOB NWE (1.00) 657.50 ↓ 646.25 643.25 639.75 639.50 626.50 609.50 3% no. 6 USGC WB (1.50) 95.95 ↓ 95.75 95.25 94.80 93.55 92.55 91.13 380 CST Cargoes FOB S'pore (1.25) 644.50 ↓ 633.50 629.25 626.00 626.75 617.25 600.25 0.1 % GO Barges FOB Rtdm 0.75 911.75 ↓ 893.25 890.25 890.25 891.25 889.25 880.25 Physical Rotterdam 380 CST (2.00) 627.00 ↓ 616.25 611.75 608.50 608.50 599.50 584.00 Physical Singapore 380 CST (3.00) 651.50 ↓ 643.75 639.50 636.25 637.50 628.00 611.00

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Confidence Medium 29-May 10:00 AM May 71 69.2 - Initial Claims Medium 31-May 8:30 AM 26-May 365K 370K - GDP High 31-May 8:30 AM Q1 1.9% 2.2% - Chicagp PMI Medium 31-May 9:45 AM May 55.0 56.2 - Nonfarm Payroll Medium 01-Jun 8:30 AM May 175K 115K - Construction Spending Medium 01-Jun 10:00 AM Apr 0.0% 0.1% - Auto Sales Low 01-Jun 2:00 PM May NA 5.0M -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 106.60 90.40 906.65 Next 107.00 90.95 908.20 Strong 108.15 92.15 914.60 Support Brent WTI GO Near 105.60 89.85 899.75 Next 104.95 89.30 896.00 Strong 104.95 88.50 890.00       Energy futures looked ok yesterday during the European session. Prices however had been pushed down later during the day and a loss at close resulted. This morning the contracts slid below the nearby support levels on all contracts. This had been a result mainly of the negative influence from the currencies as EUR/USD slid to a two years low again. The yesterday’s development of the technical picture implies a possibility that long term support levels might come under pressure again. Just to remind you the levels re as follows: Brent @ 104.95, WTI @ 89.85 and GO @ 899.75. Note WTI and GO are already under pressure. The rest of the levels are in the table.

Source: OW Risk Management