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

WTI prices inched higher yesterday, up $0.88/bbl to settle at $103.31/bbl, as API report showed a 1.82mbbl inventories decline at Cushing and at the same time weather forecasts called for more cold snaps fuelling worries about already tight supplies. On the other hand, Brent saw a little change earning $0.01/bbl to settle at $110.45, overall still supported by news on Libyan and political concerns about Sudan and Venezuela. Technically, the market short term remains bullish in Brent and the Tuesday’s sharp rise alerts for a pressing bull wave to reach the next level of 112. WTI market also looks bullish and trades lined up for direct continuation rallies. In terms of economic data, we will look at the US weekly jobless claims, January Consumer Price index and Leading Indicators. The US Energy Department will release its inventory report later today due to the President’s Day on Monday. The expectations are as follows: Crude +2.01mbbl, Distillates -1.89mbbl and Gasoline -0.54mbbl. This morning Brent slipped below $110 (-0.5%) as China Manufacturing activity in February shrank again to the lowest in seven months (48.3 vs 49.5 exp). WTI is also trading down -0.2%.

Fueloil Specifics

The NWE bunker fuel oil markets reported relatively quiet day yesterday as prices got higher in the afternoon following strengthening Brent values. Delivered 380cst product both in Antwerp and Rotterdam posted up to $2/mt gains. Rotterdam reported tight LSFO avails mainly due to refinery maintenances, with some suppliers not able to offer before February 22. The Singapore fuel oil market gained $4.0-5.0/mt during the Asian Platts window yesterday. Delivered bunker premiums have fallen more than 50% after reaching the highest level for this year at the beginning of February. Suppliers reported average demand and fine avails. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Mar Apr May Q214 Q314 Q414 NYMEX WTI Swap (1st month) 0,88 103,31 ↓ 102,33 101,32 100,28 100,25 97,21 94,59 ICE Brent Swap (1st month) 0,01 110,47 ↓ 109,83 109,48 109,08 109,10 107,53 106,01 ICE Gasoil Swap (1st month) 7,50 940,50 ↓ 933,25 929,17 924,92 925,25 918,08 910,67 3.5% Barges FOB Rtdm 7,00 588,50 ↓ 586,75 585,50 584,75 584,75 582,25 578,00 3.5% Cargoes FOB Med 5,00 585,25 ↓ 584,50 583,25 582,25 582,25 579,50 575,25 1.0% Cargoes FOB NWE 5,00 635,50 ↓ 629,25 621,00 617,75 618,00 611,25 603,00 3% no. 6 USGC WB 0,15 91,25 ↓ 91,80 91,62 91,72 91,47 91,02 88,66 380 CST Cargoes FOB S'pore 4,75 613,25 ↓ 610,00 607,75 606,50 606,50 603,75 601,75 0.1 % GO Barges FOB Rtdm 6,75 939,75 ↓ 934,25 930,25 926,25 926,25 919,25 912,25 Physical Rotterdam 380 CST 2,00 588,00 ↓ 592,00 590,75 590,00 590,00 587,50 583,25 Physical Singapore 380 CST 4,50 621,25 ↓ 615,25 613,00 611,75 611,75 609,00 607,00

Focus of the day: Houston

Due to President’s Day holiday on Monday 17, the U.S. bunker market started the week short and in cotango. Residuals and papers kept their upward movement which was quickly reflected into the bunkers’ price. Gulf Coast remained tight on LSFO avails especially in Houston; where the HI-LO premium spread was reported at $110-120. On another note, New Orleans bunker market has also been traded above Panama and Houston’s levels since the beginning of the year mainly due to dryness and the exit of two physical suppliers from that market. Overall, the year has started promising for the U.S. Gulf Coast, especially when it’s compared to the last three years. However, the third week of February is already showing signs that demand is slowing down its pace and about to turn things around. Prices are expected to continue strong until mid of June.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire State Index Medium 18-Feb 8:30 AM Feb 9.0 12.5 4.48 Core PPI High 19-Feb 8:30 AM Jan 0.2% 0.3% 0.2% Weekly Jobless Claims Medium 20-Feb 8:30 AM 15-feb 325K 339K - Core CPI High 20-Feb 8:30 AM Jan 0.2% 0.1% - Leading Indicators Medium 20-Feb 10:00 AM Jan - 0.1% - Existing Home Sales Medium 21-Feb 10:00 AM Jan 4.7M 4.87M -

Source: OW Risk Management