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

Yesterday crude closed mixed as April Brent gained 11 cents to $117.88 while March WTI settled at $97,01, down by $0,50. Markets were lifted by positive economic data showing that industrial production in the Eurozone expanded by 0,7% in December vs. 0,2% expected. Oil prices were also supported by a report that Iranian oil exports are expected to fall further this year due to tightening sanctions. Shipments from Iran slid 36% in January and nation’s output has sunk to the lowest in more than 3 decades after US sanctions restricted the use of USD in the payment for Iranian oil. However, markets came under pressure as IEA reported a downgrade of 90kb/d to their forecast for global demand following the weaker IMF economic outlook, with total oil demand predicted at 90.7mb/d (0.9% increase vs 2012). Technically, we remain capped to the upside resistance levels. Any downside in the complex, in general, has been met with solid buying interest, some of which is coming from the consumer side that missed better hedging opportunities late last year/early this year. Investors now are awaiting the outcome of the meeting of finance ministers and central bankers of the G20 countries, that starts today, which may shed some light on the outlook for the global economy. This morning crude is trading up.

Fueloil Specifics

The NWE bunker fuel oil markets saw good demand on Wednesday. Delivered 380cst product both in Rotterdam and Antwerp was assessed unchanged from previous day. Barge congestion remains an issue in Rotterdam where ship owners have to wait 2-3 days to get their products. Scandinavian ports reported average demand with sufficient product avails. Asia's 180cst fuel oil cash differentials were stronger on Wednesday rising to the highest in more-than-five-weeks, at a $2.56/mt discount to Singapore quotes, on the back of expectations of lower February arbitrage arrivals. Traders are now expecting around 3.9 million tonnes of Western cargoes to berth at Asian ports during the month, 25.7% lower than the previous month. Liquidity in the derivatives market was however, subdued because most market participants were still away for the Lunar New Year festivities. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Mar Apr May Q213 Q313 Q413 NYMEX WTI Swap (1st month) (0,50) 97,01 ↑ 97,98 98,47 98,88 98,83 98,84 97,92 ICE Brent Swap (1st month) 0,11 117,88 ↑ 117,80 116,94 116,12 116,14 113,81 111,76 ICE Gasoil Swap (1st month) (15,25) 1011,00 ↑ 1009,58 1001,75 994,17 994,72 979,67 969,17 3.5% Barges FOB Rtdm 1,50 641,50 ↑ 642,25 640,50 639,00 639,00 634,50 629,75 3.5% Cargoes FOB Med 2,00 634,50 ↑ 635,50 635,50 634,50 634,25 629,50 624,50 1.0% Cargoes FOB NWE 3,25 684,00 ↑ 684,25 683,00 681,25 681,25 673,75 664,00 3% no. 6 USGC WB 0,11 101,08 ↑ 100,90 100,65 100,40 100,40 99,65 98,65 380 CST Cargoes FOB S'pore 3,50 665,25 ↑ 663,75 662,50 662,00 661,75 657,50 653,50 0.1 % GO Barges FOB Rtdm 2,00 1014,25 ↑ 1010,25 1002,25 994,25 996,25 979,25 969,25 Physical Rotterdam 380 CST 0,00 645,25 ↑ 649,50 647,75 646,25 646,25 641,75 637,00 Physical Singapore 380 CST 3,50 669,25 ↑ 671,50 670,25 669,75 669,50 665,25 661,25

Focus of the day: Houston

Wednesday USGC 3% was assessed at $100.83/bbl, up 11 cents from Tuesday. However, demand on US Gulf Coast bunker market hasn't increased much since last week. Houston and New Orleans have heard of very few inquiries and done deals. The spread between IFO 380 & IFO 180 has narrowed down by $5/mt to $90/mt in Houston and $3/MT to $90/mt in New Orleans. Yesterday, Houston was assessed at $654.5/mt for IFO 380, and $744.5/mt for IFO 180. New Orleans was assessed at $652.5/mt and $742.5/mt respectively. The increase in 3.5%S IFO 180 at both ports reflected price rises in crude future and fuel oil on Wednesday.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 13-feb 8:30 AM Jan -0.4% 0.5% 0.1% Business Inventories Medium 13-feb 10:00 AM Dec 0.1% 0.3% 0.1% Initial Claims Medium 14-feb 8:30 AM 09-feb 365K 366K - Continuing Claims Medium 14-feb 8:30 AM 02-feb 3200K 3224K - Empire Manufacturing Medium 14-feb 8:30 AM Feb -2.0 -7.8 - Industrial Production Medium 15-feb 9:15 AM Jan 0.4% 0.3% - Michigan Sentiment High 15-feb 9:55 AM Feb 73.0 73.8 -

Source: OW Risk Management