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 surged up more than 2% on close yesterday. Markets were supported by tensions along Syrian and Turkey borders which kept the risk of Oil disruption from Iraq. There are also growing expectation of Chinese stimulus after the recent soft economic data and the upcoming change of leadership. The Saudi Arabia oil minister reiterated that current Oil price levels are suitable to support the current world growth, however still expects to see prices soften. Saudi Arabia; the largest producer in OPEC has been producing at a 30 year high around 10 million bbls per day to make up for the shortfall from Iran. The November WTI Oil contract closed at $92.39/bbl, up by $3.06 and Brent gained $2.68 to $114.50/bbl. The US inventory report is tomorrow due to the holiday break on Monday in the US but we will look for the Weekly API by the end of the day. Today US Wholesale Inventories will be published and Market will keep an eye on Fed’s Beige book comments. This morning, crude is trading down.

Fueloil Specifics

The Northwest European fuel oil markets closed higher yesterday. Delivered 380cst product in Rotterdam was assessed app.$2/mt up following stronger cargo prices that surged nearly $7/mt compared to previous day close. Demand in the area remained subdued while Rotterdam continues to struggle with tight hsfo and lsfo avails. The Singapore fuel oil markets were around parity ranging from -$0.50 to +$0.50 yesterday during the morning Platts window. The Asian Fuel Oil cracks came off significantly yesterday as slower demand is weighing on ample supply in the market. The delivered bunker premiums were around $8.0 above cargo prices. Bunker fuel oil swaps gained up to $8.5/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was around one dollar weaker. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Nov Dec Jan Q113 Q213 2013 NYMEX WTI Swap (1st month) 3.06 92.39 ↓ 92.29 92.75 93.31 93.69 94.52 92.31 ICE Brent Swap (1st month) 2.68 114.50 ↓ 112.52 111.68 110.96 110.33 108.57 112.57 ICE Gasoil Swap (1st month) 8.50 1002.00 ↑ 986.42 974.33 969.48 964.89 949.75 948.05 3.5% Barges FOB Rtdm 6.75 614.75 ↑ 629.25 628.75 628.75 627.50 622.50 619.50 3.5% Cargoes FOB Med 9.25 615.50 ↑ 624.50 622.75 621.50 622.50 618.50 615.50 1.0% Cargoes FOB NWE 6.25 653.50 ↑ 664.25 662.75 662.75 661.50 656.25 653.00 3% no. 6 USGC WB 2.45 98.05 ↑ 98.17 97.97 97.67 97.67 96.92 96.48 380 CST Cargoes FOB S'pore (0.75) 630.25 ↑ 654.00 653.50 653.00 651.50 646.75 643.75 0.1 % GO Barges FOB Rtdm 8.00 1000.50 ↑ 986.25 974.25 965.25 958.25 943.25 943.25 Physical Rotterdam 380 CST 2.00 620.75 ↑ 639.50 639.00 639.00 637.75 632.75 629.75 Physical Singapore 380 CST (1.00) 638.00 ↑ 664.25 663.75 663.25 662.25 657.50 654.50

Focus of the day: Singapore

Singapore's fuel oil stocks dropped to a five-week low, onshore stocks falling by 627,000 bbl to 17.905 million barrels, a decline of almost 3.4%. Reports said there had been fewer fuel oil arbitrage cargoes arriving, particularly from Venezuela. At the same time, lower outright prices had triggered demand from China's independent 'teapot' refineries. Looking head, traders expect Western fuel oil inflows to increase in the coming weeks with arbitrage cargoes estimated at around five million metric tonnes in October. Prices for intermediate fuel oil (IFO) were mixed at key Asian ports on Tuesday. In Singapore, the price of 380cst gained $1.50 to $636/mt while marine gas oil (MGO) rose $5 to $964/mt. Demand was below average and supplies fine. Earliest dates for bunker deliveries were from October 12 to 13 onwards.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Medium 10-Oct 10:00 AM Aug 0.5% 0.7% - Treasury Budget Medium 10-Oct 2:00 PM Sep NA -$62.8B - Initial Claims Medium 11-Oct 8:30 AM 06-Oct 375K 367K - Trade Balanace Medium 11-Oct 8:30 AM Aug -$44.6B -$42.0B - Core PPI High 12-Oct 8:30 AM Sep 0.1% 0.2% - Mich Sentiment High 12-Oct 9:55 AM Oct 80.0 78.3 -

Source: OW Risk Management