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 were trending mostly directionless as both US and UK markets were closed on holiday and trading volumes were thin. Crude remained pressured by the global economy worries and ample supply. Weak manufacturing data from China and US have been weighting on oil prices. However, some traders believe that the start of US summer driving season might provide some support. Markets will be focusing on the upcoming OPEC meeting on Friday and it is believed that OPEC is unlikely to change the production quotas although there is growing concerns on the softer oil demand outlook. The US inventory report will be delayed by one day due to the holiday yesterday. The July WTI futures closed $94.15/bbl, down another -$0.10 while the July Brent contracts settled $102.62/bbl, slipping -$0.02. This morning, crude is trading higher.

Fueloil Specifics

The Northwest European bunker fuel oil markets started the week with slightly lower prices. Main ports in the area continue to report tight HSFO avails. Due to Bank holiday in UK, there were no settlement prices. The Singapore fuel oil market reopened Monday after a long weekend. The fuel oil prices rose between +$3.0 to +$5.0 during the morning Platts window. The delivered bunker premiums were around +$7.5 above cargoes prices. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q313 Q413 2014 NYMEX WTI Swap (1st month) (0,10) 94,15 ↑ 94,64 94,78 94,60 94,51 93,26 90,18 ICE Brent Swap (1st month) (0,02) 102,62 ↑ 103,37 103,08 102,75 102,75 101,71 99,41 ICE Gasoil Swap (1st month) 4,25 858,50 ↑ 869,08 870,67 873,25 873,29 878,67 869,53 3.5% Barges FOB Rtdm (0,25) 573,00 ↑ 582,00 579,50 577,50 578,50 575,50 567,75 3.5% Cargoes FOB Med 2,25 566,00 ↑ 576,25 574,25 572,50 573,50 568,75 564,25 1.0% Cargoes FOB NWE 5,50 596,50 ↑ 609,00 611,50 610,00 610,25 605,25 594,75 3% no. 6 USGC WB (0,49) 90,62 ↑ 91,00 91,00 90,50 91,00 90,00 89,25 380 CST Cargoes FOB S'pore 3,50 595,25 ↑ 603,75 603,00 601,25 600,75 597,25 592,50 0.1 % GO Barges FOB Rtdm 4,75 855,00 ↑ 869,25 871,25 873,25 873,25 875,25 868,25 Physical Rotterdam 380 CST 2,00 577,25 ↑ 587,25 585,25 583,25 583,75 578,75 573,50 Physical Singapore 380 CST 4,50 602,75 ↑ 611,00 609,75 608,00 608,00 604,50 601,25

Focus of the day: ARA

The picture regarding avails is certainly not looking prettier than last week. Congestion at terminals, barges waiting for days remain today’s story. Hence we maintain advice to buy well in advance. Although crude was mostly Southbound over the last week, surging cracks / stronger front spread made the fuel oil virtually stand still. It seems to be delinked for the moment as local economics in ARA prevail over macroeconomics. The low sulphur premium proved to be a little surprising this week as premium gained about five dollars, leaving it at around 25 dollars for the moment. The gasoil market can be called disastrous. Unusual early commitment by gasoil suppliers, mainly because loading schedules are less flexible than they were over the past few months, urges us to give an early buying advice on this product as well. Notification periods for the different grades; six days for high sulphur enquiries and four working days for low sulphur enquiries, 3 working days for gasoil enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Case- Schiller 20-city Index Medium 28-May 9:00 AM Mar 10.0% 9.3% - Consumer Confidence High 28-May 10:00 AM May 72.5 68.1 - Initial Claims Medium 30-May 8:30 AM 25-May 345K 340K - Continuing Claims Medium 30-May 8:30 AM 18-May 3000K 2912K - GDP-2nd estimate High 30-May 8:30 AM Q1 1.2% 1.2% - Pending Home Sales Medium 30-May 10:00 AM Apr 0.0% 1.5% - Personal Income Medium 31-May 8:30 AM Apr -0.2% 0.2% - Chicago PMI Medium 31-May 9:45 AM May 49.5 49.0 - Michigan Sentiment Medium 31-May 9:55 AM May 82.5 83.7 -

Source: OW Risk Management