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 Oil lost all the previous day gains. Euro/Usd fell to a three month  low before today’s ECB meeting. Some speculations that the European Central Bank will cut rates are alive although with low odds. The US inventory reports yesterday by the Energy Department showed a bigger than expected build in crude stockpile(+3,8 Mios bbl). Distillates drew more than expected (-3,8 Mios bbl vs -1 Mios exp) and Gasoline a bit better (-0,6 vs -1 Mio). Goldman said that US oil-demand weakness may be overstated because disruptions from Hurricane Sandy in October at pipelines and terminals that have made it difficult for refiner to ship products. Market rebounded towards the close, as US beige book reported that economic activities grew at a moderate pace and also committed for continuous  stimulus measures. The April WTI contract traded below the $90 mark, hitting a low of $89.55/bbl before gaining back to close at $90.43/bbl, slipping only -$0.39. Brent  closed at $111.06/bbl, down -$0.55. The US weekly jobless claims will be reported later this afternoon. This morning, crude is trading marginally up.

Fueloil Specifics

The NWE bunker fuel oil markets reported average demand and slightly higher prices yesterday. Delivered 380cst product both in Rotterdam and Antwerp ports was assessed app.$3/mt up from previous days close. There were also reported some delays at loading installations as well as barge congestions. Lsfo avails remain tight for prompt deliveries and premiums increasing to $6-8/mt. The Singapore fuel oil market surged more than $8.0 during the morning window yesterday led by a stronger previous crude value. The increasing buying interest in the fuel oil paper narrowed the Asian cracks sharply. Market sentiment is also moved firmer with the market structure flipping into backwardation since last year October when ample incoming supplies weigh the market down. The delivered bunker premiums were ranging between $3.0 to $5.5 above cargo prices yesterday. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Apr May Jun Q313 Q413 2014 NYMEX WTI Swap (1st month) (0,39) 90,43 ↑ 91,09 91,46 91,68 91,53 90,89 88,87 ICE Brent Swap (1st month) (0,55) 111,06 ↓ 109,55 108,80 108,14 106,75 104,90 101,50 ICE Gasoil Swap (1st month) 2,25 927,00 ↑ 928,92 925,75 923,00 920,06 911,78 890,37 3.5% Barges FOB Rtdm 3,00 605,25 ↑ 606,25 604,75 603,25 600,00 594,25 581,00 3.5% Cargoes FOB Med 4,00 604,25 ↑ 602,25 601,50 600,50 596,75 588,25 576,75 1.0% Cargoes FOB NWE 2,50 630,25 ↑ 635,00 636,50 635,75 632,75 626,00 609,50 3% no. 6 USGC WB (0,21) 96,09 ↑ 95,35 94,85 94,60 93,85 93,10 88,10 380 CST Cargoes FOB S'pore 8,25 640,00 ↑ 629,75 628,50 627,50 624,75 619,75 624,75 0.1 % GO Barges FOB Rtdm 3,25 927,75 ↑ 930,25 927,25 924,25 921,25 913,25 892,25 Physical Rotterdam 380 CST 3,00 608,25 ↑ 613,50 612,00 610,50 607,25 601,50 588,25 Physical Singapore 380 CST 9,00 645,50 ↑ 637,50 636,25 635,25 632,50 627,50 632,50

Focus of the day: Houston

Despite a weaker Gulf Coast fuel oil market and Oil Futures, US bunker market strengthened along the Gulf Coast Wednesday. Demand is slightly better than on Tuesday, but with resupply costs still at higher levels, suppliers said they needed to raise offers. Bunker prices were heard to be higher on significant increase in the bunker resupply market. Based on market indication, Platts assessed IFO 380 both in Houston and in New Orleans up $2 to $612/mt ex-wharf. In the West Coast Bunker market, things are also very quiet, low demand coupled with weaker ICE Brent futures kept buyers out of the market.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual ISM Services Medium 05-mar 10:00 AM Feb 56.0 55.2 56.0 ADP Employment Change Medium 06-mar 8:15 AM Feb 150K 192K 198K Factory Orders Medium 06-mar 10:00 AM Jan -3.0% 1.8% -2.0% Initial Claims Medium 07-mar 8:30 AM 02-mar 355K 344K - Trade Balance Medium 07-mar 8:30 AM Jan -$45.0B -$38.5B - Consumer Credit Medium 07-mar 3:00 PM Jan $10.0B $14.6B - Nonfarm Payroll High 08-mar 8:30 AM Feb 170K 157K - Unemployment Rate High 08-mar 8:30 AM Feb 7.9% 7.9% - Wholesale Inventories Medium 08-mar 10:00 AM Jan 0.2% 0.2% -

Source: OW Risk Management