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 closed the first week of the year on its biggest weekly gain in three months lifted by positive US macro drivers. The last minute –temporary- resolution of the fiscal cliff managed to cheer up market mood. Also a slightly better than forecasted  US Nonfarm Payrolls at +155k despite a higher Unemployment rate than expected at 7,8% injected some level of optimism. The inventory report from the US Energy Department revealed a massive draw of 11.1 mbbl while the product inventory saw more than expected builds. The inventory report is leaning more towards the bearish side as the massive crude draw is more due to reduction of inventory levels and year end accounting and tax optimization reasons rather than driven by demand. The February WTI contracts managed to inch up +$0.17 to close at $93.09/bbl while the February Brent futures fell -$0.83 to $111.31/bbl. This morning, crude is trading slightly down.

Fueloil Specifics

The Northwest European fuel oil markets closed the first week of the year mixed. Delivered 380cst product in Rotterdam was assessed up by app.$3/mt while cargo prices were down nearly $2/mt. Demand in the area remained subdued and is expected to pick up during the week with buyers returning from holidays. The Singapore markets rose more than $10.5 during the Platts window last Friday despite the weaker crude movement. The extreme strong buying of Fuel Oil swaps lifted Asian cracks significantly. The delivered bunker premiums were seen app.$4.0 above cargo prices last Friday. Bunker fuel oil swaps lost app.$2/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was significantly weaker, assessed down by more than $5/mt. This morning both markets are trading slightly down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q213 Q313 2013 NYMEX WTI Swap (1st month) 0,17 93,09 ↓ 93,31 93,64 93,93 93,99 94,08 93,54 ICE Brent Swap (1st month) (0,83) 111,31 ↓ 109,54 108,77 108,12 107,52 105,69 106,78 ICE Gasoil Swap (1st month) (7,25) 928,50 ↑ 933,33 929,67 927,28 924,23 918,03 922,14 3.5% Barges FOB Rtdm (1,75) 601,75 ↓ 599,75 599,00 598,50 597,50 594,00 595,00 3.5% Cargoes FOB Med (2,25) 592,25 ↓ 591,25 592,50 591,50 591,50 588,50 589,00 1.0% Cargoes FOB NWE (3,75) 618,50 ↓ 622,25 624,00 624,50 624,50 623,50 621,75 3% no. 6 USGC WB (0,34) 97,31 ↓ 96,05 95,30 94,80 94,05 93,30 93,80 380 CST Cargoes FOB S'pore 11,00 629,00 ↓ 624,75 624,00 623,50 622,75 619,50 620,50 0.1 % GO Barges FOB Rtdm (7,00) 927,00 ↑ 933,25 930,25 925,25 923,25 915,25 920,25 Physical Rotterdam 380 CST 3,00 605,00 ↓ 610,00 609,25 608,75 607,75 604,25 605,25 Physical Singapore 380 CST 11,00 632,75 ↓ 635,00 634,25 633,75 633,50 630,25 631,25

Focus of the day: Gibraltar

The Gibraltar Strait is finally running smoothly after facing some congestion issues over the weekend. The weather forecast for the rest of the week is good so operations are expected to take place without major delays this week. The Med market is rather flat and quiet this morning, with Spain closed due to the Three Wise Men holiday that will put an end to the Xmas Season. Product availability is good in both Gibraltar and Algeciras, while some suppliers in Ceuta lack availability for prompt deliveries. CIF Med 3.5% is trading some 6 usd above FOB Barges Rotterdam and the HILO spread in the Med is currently at 36 usd.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Credit Medium 08-jan 3:00 PM Nov $8.0B $14.2B - MBA Mortgage Index Medium 09-jan 7:00 AM 05-jan NA NA - Initial Claims Medium 10-jan 8:30 AM 05-jan 365K 372K - Wholesale Inventories Medium 10-jan 10:00 AM Nov 0.2% 0.6% - Trade Balance Medium 11-jan 8:30 AM Nov -$45.0B -$42.2B - Treasury Budget Medium 11-jan 2:00 PM Dec NA -$86.0B -

Source: OW Risk Management