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 prices tried to stabilize in a low volatility session. The July WTI contract rose +$0.62 to close at $83.32/bbl and July Brent dipped by -$0.86 to 97.14/bbl. The EIA will release its Short Term demand outlook which is likely to show some decline. The biggest producer in OPEC, Saudi Arabia, has proposed to increase supply targets albeit disapproval of most OPEC members especially in the light of the recent weakening of prices. OPEC is most probably going to maintain the production targets in tomorrow’s meeting according to general market belief. In term of economic data, we will look at the US Retail Sales to see if the American consumer is still spending to support the US economy and later in the day the US Business Inventories. We will also look at the US Energy department of Energy Inventory Report later today and expectations are as follows: Crude -1.4 mbbl, Distillates +1.3 mbbl, and Gasoline +1.1 mbbl. This morning, crude is trading mixed, with July Brent up by 0.3.

Fueloil Specifics

The NWE bunker fuel markets saw mixed activity levels throughout the day yesterday. ARA hub reported slow morning but a bit busier afternoon following lower offers. Delivered 380cst product in Rotterdam was assessed app.$1/mt up while cargoes gained slightly more than $4/mt. The Singapore fuel oil markets fell more than -$12.0 during the Platts window yesterday. The cargo premiums saw some strengthening also reflected in the delivered bunker premiums. It was assessed app. $8.5 above cargo prices yesterday. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jul Aug Sep Q312 Q412 2013 NYMEX WTI Swap (1st month) 0.62 83.32 ↓ 83.67 83.94 84.34 83.98 84.92 84.92 ICE Brent Swap (1st month) (0.86) 97.14 ↑ 97.31 97.26 97.18 97.25 97.12 97.12 ICE Gasoil Swap (1st month) 0.00 846.00 ↓ 843.75 841.50 840.50 841.92 841.22 841.94 3.5% Barges FOB Rtdm 4.25 572.50 ↑ 567.25 562.75 559.25 563.00 554.25 545.25 3.5% Cargoes FOB Med 2.25 581.50 ↑ 565.25 559.50 555.50 560.25 550.50 541.25 1.0% Cargoes FOB NWE 0.00 657.50 ↑ 599.25 596.00 592.25 595.75 585.75 577.25 3% no. 6 USGC WB 1.03 88.25 ↑ 88.60 88.15 87.72 87.02 86.32 85.54 380 CST Cargoes FOB S'pore (13.25) 592.25 ↑ 594.25 589.25 585.00 589.75 580.25 570.00 0.1 % GO Barges FOB Rtdm 0.75 852.00 ↓ 844.25 842.25 841.25 843.25 840.25 841.25 Physical Rotterdam 380 CST 1.00 581.00 ↑ 577.50 573.00 569.50 573.25 564.50 555.50 Physical Singapore 380 CST (11.50) 600.00 ↑ 604.50 599.50 595.25 600.50 591.00 580.75

Focus of the day: Singapore

Singapore's onshore fuel oil stocks fell in the week ended June 6. They stood at 19.75 million barrels, down by 607,000bbl from the week before. Players said there had been no fuel oil imports from India in the seven-day period. They said stocks would have fallen still further but for strong arbitrage inflows from the West and weak Chinese demand. Looking ahead, traders said that demand from China was likely to remain weak as the country's small independent refiners, which use fuel oil as feed stock, had been sidelined by volatile prices. Western arbitrage arrivals are expected to fall in the coming weeks, with total imports for June pegged at around 4.2 million metric tones, 5% lower than May. Bunker prices in Asia were falling again on Tuesday having firmed when trading began after the weekend. In Singapore, the price of 380cst grade fell $12.50 to $596.50/mt. Marine gas oil was down $18.50 to $841.50/mt. Demand was average and supplies sufficient, according to local players. June 18 was the earliest date for deliveries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Export Prices Medium 12-Jun 8:30 AM May NA 0.2% -0.5% Import Prices Medium 12-Jun 8:30 AM May NA 0.1% -0.1% Treasury Budget Medium 12-Jun 2:00 PM May NA -$57.6B -$124.6B Retail Sales High 13-Jun 8:30 AM May -0.3% 0.1% - PPI Medium 13-Jun 8:30 AM May 0.1% 0.2% - Business Inventories Medium 13-Jun 10:00 AM Apr 0.2% 0.3% - Initial Claims Medium 14-Jun 8:30 AM 09-Jun 375K 377K - CPI High 14-Jun 8:30 AM May 0.1% 0.2% - Empire Manufacturing Medium 15-Jun 8:30 AM Jun 10.0 17.1 - Industrial Production Medium 15-Jun 9:15 AM May 0.1% 1.1% - Capacity Utilization Medium 15-Jun 9:15 AM May 79.2% 79.2% - Michigan Sentiment High 15-Jun 9:55 AM Jun 77.0 79.3 -

Source: OW Risk Management