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 started off slow yesterday and traded higher during the market hours on positive housing starts in the U.S. reporting an increase of 15% last month while building permits grew 11.6% exceeding the forecasts. Market was also supported by news that Moody’s Investor Service upheld Spain’s credit rating which accordingly strengthened Euro against USD. However gains were pared after EIA released a bearish crude stockpile report at 2.86mbbl versus 1.68mbbl expected, while distillates reported a draw of 2.2mbbl (expected -1.2mbbl)- the lowest level for this time of year in 12 years. Gasoline stocks reported a build of 1.72mbbl versus 0.49mbbl expected. The November WTI contracts closed at $92.12/bbl, highest settlement since Oct 9 while December Brent futures closed at 113.12, down $0.10. Chinese economic data tonight, including the 3rd quarter GDP indicated a slightly slower economic growth for 7th quarter in a row. Even though industrial production, retail sales and investment data were reported marginally better than expected and GDP grew 7.4% in the third quarter compared to same period last year, it still represents a slowdown for the China. GDP grew 9.2% in 2011 and has averaged an annual rate close to 10% for the last 3 decades. This year market expects GDP growth of approximately 7.5%. Today investors await the start of a 2-days EU summit and US weekly initial jobless claims later in the afternoon. This morning, crude is trading up.

Fueloil Specifics

The Northwest European bunker fuel prices weakened yesterday with both delivered 380cst product in Rotterdam and cargo prices posting app.$3/mt losses. Demand in the area remained sluggish, with ship owners expecting better prices in the coming days and delaying ETA of vessels. Some suppliers in Rotterdam reported operational delays resulting in difficulties loading both hsfo and lsfo products. The Singapore fuel oil markets posted losses in a range of $8.75-3.00 during the morning Platts window yesterday. Demand in the area was reported as below average and avails were fine with earliest deliveries from October 22 onwards. This morning both markets are trading slightly 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) 0.03 92.12 ↑ 92.72 93.17 93.62 93.99 94.66 94.44 ICE Brent Swap (1st month) (0.40) 113.22 ↑ 113.14 112.53 112.03 111.59 110.21 109.44 ICE Gasoil Swap (1st month) (6.50) 996.75 ↑ 993.08 982.83 975.83 969.97 958.18 956.63 3.5% Barges FOB Rtdm (3.25) 614.75 ↑ 617.50 618.75 620.50 620.50 619.00 617.00 3.5% Cargoes FOB Med (3.50) 616.25 ↑ 612.50 613.00 612.75 615.50 614.75 613.00 1.0% Cargoes FOB NWE 1.00 642.25 ↑ 645.00 648.00 650.25 650.50 649.50 647.50 3% no. 6 USGC WB (1.20) 97.00 ↑ 96.88 96.83 97.13 97.13 96.93 96.57 380 CST Cargoes FOB S'pore (6.75) 642.75 ↑ 640.25 640.75 642.00 642.00 641.00 639.00 0.1 % GO Barges FOB Rtdm (5.75) 1009.50 ↑ 993.25 983.25 976.25 971.25 957.25 956.25 Physical Rotterdam 380 CST (3.00) 623.75 ↑ 627.75 629.00 630.75 630.75 629.25 627.25 Physical Singapore 380 CST (8.75) 647.00 ↑ 650.50 651.00 652.25 652.75 651.75 649.75

Focus of the day: Houston

The US Gulf Coast bunker market weakened Tuesday as there was less demand from buyers in the region. Houston 380 CST was heard in the low-to-mid $630s/mt, while low sulfur bunker fuel oil was still heard at a $100/mt premium to the high sulfur market. Houston 380 CST was finally assessed $7/mt lower at $631-635/mt and 1%S 380 CST was also assessed $7/mt lower at $731-735/mt. In the New Orleans bunker market, it was difficult to find many suppliers to deliver prompt bunker fuel oil, the lack of prompt supply did not affect the spread between New Orleans and Houston as "the remaining suppliers are keen to compete" in New Orleans. New Orleans 380 CST was heard in the high $630s/mt to low $640s/mt Tuesday morning and then in the mid-to-high $630s/mt Tuesday afternoon. Houston and NOLA marine gasoil was finally assessed around $6/mt lower than yesterday.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-Oct 8:30 AM Sep 1.0% 0.9% 1.1% Empire Manufacturing Medium 15-Oct 8:30 AM Sep -2.0 -10.4 -6.2 Business Inventories Medium 15-Oct 10:00 AM Aug 0.5% 0.8% 0.6% Core CPI High 16-Oct 8:30 AM Sep 0.1% 0.1% 0.1% Net Long-Term TIC Flows Medium 16-Oct 9:00 AM Aug NA $67.0B $90.0B Industrial Production Medium 16-Oct 9:15 AM Sep 0.0% -1.2% 0.4% Capacity Utilization Medium 16-Oct 9:15 AM Sep 78.2% 78.2% 78.3% Housing Starts Medium 17-Oct 8:30 AM Sep 765K 750K 872K Biulding Permits Medium 17-Oct 8:30 AM Sep 815K 803K 894K Initial Claims Medium 18-Oct 8:30 AM Oct-13 370K 339K - Philadelphia Fed Medium 18-Oct 10:00 AM Sep 0.1% -0.1% - Existing Home Sales Medium 19-Oct 10:00 AM Sep 4.90M 4.82M -

Source: OW Risk Management