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.
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Crude prices extended their weakness, shedding more than $3/bbl on close yesterday. The August WTI contract fell -$3.60, to close below the $80 mark reaching a new recent low at $78.20/bbl while Brent dropped -$3.46 to close at $89.23/bbl. Market was disappointed after the lack of another round of quantitative easing from the US Federal Reserve. The last US Manufacturing data showed the largest contraction in a year with similar slowdown seen in Europe and China dampening oil demand outlook and economic growth. Adding to the bearish sentiment, the credit rating agency Moody’s downgraded 15 of the biggest banks. Fundamentally, there are sufficient crude supply and inventories to buffer against the effect of Iran crude sanction. Saudi Arabia, the largest producer in OPEC has been maintaining strong production supply. With the recent rapid drop in Crude Oil prices, OPEC may have to reassess their production targets sooner than later.
This morning, crude is trading up.
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The Northwest European fuel oil prices posted double digit losses following Brent weakness. Delivered 380cst product lost app.$19/mt to it’s lowest since February 2011, while cargo prices were even weaker, down by more than $20/mt. ARA hub continue to struggle with delays at loading installations due to product shortages. The Singapore fuel oil markets fell more than $14.0 during the morning window yesterday tracking crude movement. The Asian crack narrowed significantly held by strong buying interests. The bunker premiums remained around $8.5 above cargo prices. Bunker fuel oil swaps lost nearly $21/mt at the front of the forward curve both in Singapore and Rotterdam. Backend was again slightly stronger, posting app.$16/mt losses. This morning both markets are trading down.
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Settlement & Indications (mid values)
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Product
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Yesterday's Values
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Forward Indications
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Product
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Change
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Last
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Dir.
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Jul
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Aug
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Sep
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Q312
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Q412
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2013
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NYMEX WTI Swap (1st month)
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(3.60)
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78.20
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↑
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78.64
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78.99
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79.43
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79.02
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80.21
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80.21
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ICE Brent Swap (1st month)
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(3.46)
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89.23
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↑
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90.27
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90.51
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90.74
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90.51
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91.24
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91.24
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ICE Gasoil Swap (1st month)
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(19.25)
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822.00
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↓
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808.75
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805.17
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804.42
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806.11
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803.03
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804.47
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3.5% Barges FOB Rtdm
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(21.00)
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538.00
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↓
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534.25
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529.25
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525.75
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529.75
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521.50
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518.75
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3.5% Cargoes FOB Med
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(19.50)
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538.25
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↓
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531.75
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526.00
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522.00
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526.50
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517.75
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514.75
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1.0% Cargoes FOB NWE
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(23.25)
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657.50
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↓
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562.00
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558.50
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555.00
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558.50
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551.00
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551.00
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3% no. 6 USGC WB
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(2.38)
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82.38
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↓
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82.80
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82.20
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81.90
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81.47
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81.20
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80.94
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380 CST Cargoes FOB S'pore
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(15.00)
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573.75
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↓
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561.25
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555.25
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551.00
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555.75
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546.75
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542.25
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0.1 % GO Barges FOB Rtdm
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(19.75)
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823.50
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↓
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809.25
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806.25
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804.25
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807.25
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802.25
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804.25
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Physical Rotterdam 380 CST
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(19.00)
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550.00
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↓
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544.50
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539.50
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536.00
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540.00
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531.75
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529.00
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Physical Singapore 380 CST
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(15.50)
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581.75
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↓
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571.50
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565.50
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561.25
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566.50
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557.50
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553.00
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Focus of the day: Piraeus
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Piraeus was fairly busy this week. Crude market continued dropping and CIF MED 3,5% declined another $ 38.00 since last Friday. Demand was satisfactory all through the week and supplies were smooth. MOH refinery has returned to bunker fuel production and loadings are running smoothly on both refineries. Barge availability has been good, even for prompt enquiries, although some suppliers are not willing to quote for small lots of LSFO. Despite the strong northern winds blowing all through the week there were no disruptions in supplies at Piraeus roads.
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Economy fundamentals this week
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Fundamental Indicators
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Statistic
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Importance
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Date
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Time
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Period
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Consensus
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Last
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Actual
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NAHB Housing Market Index
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Medium
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18-Jun
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10:00 AM
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Jun
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28
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29
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29
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Housing Starts
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Medium
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19-Jun
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8:30 AM
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May
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710K
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717K
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708K
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Building Permits
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Medium
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19-Jun
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8:30 AM
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May
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720K
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715K
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780K
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MBA Mortgage Index
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Medium
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20-Jun
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7:00 AM
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16-Jun
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NA
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18.0%
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-0.8%
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FOMC Rate Decision
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Medium
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20-Jun
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12:30 PM
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Jun
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0.25%
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0.25%
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0.25%
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Initial Claims
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Medium
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21-Jun
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8:30 AM
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16-Jun
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380K
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386K
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387K
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Existing Home Sales
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Medium
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21-Jun
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10:00 AM
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May
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4.50M
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4.62M
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4.55M
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Philadelphia Fed
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Medium
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21-Jun
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10:00 AM
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Jun
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-3.5
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-5.8
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-16.6
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Leading Indicators
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Medium
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21-Jun
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10:00 AM
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May
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0.0%
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-0.1%
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0.3%
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Source: OW Risk Management