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 Oil closed higher for 12th out of 15 trading days in August for Brent. The September WTI contract expired at $96.68 yesterday up +$0.71 and October closed at $96.84/bbl, gaining +$0.58. The October Brent contract finished up +$0.94 at $114.64/bbl. The Euros strengthened yesterday as optimism was back in force that a solution will emerge for the European Sovereign Bond crisis. The tightness in Oil supply with declining production in the North Sea and Iran sanctions are supporting Brent prices. The US inventory reports from API were bullish with a massive crude draw of -6.0 mbbl due to lower imports, lending further strength to Crude Oil yesterday. The more reliable data from the US Energy department will be released later today and the expectations are as follows: Crude -0.4 mbbl, Distillates +1.0 mbbl, Gasoline -0.7 mbbl. This morning, Brent is trading down while WTI is up.

Fueloil Specifics

The NWE fuel oil prices were up yesterday following stronger crude. Delivered 380cst product was assessed up by app.$9/mt compared to previous day close while cargo prices were even stronger, posting more than $10/mt gains. Demand in the area remained weak. The Singapore fuel oil market prices slipped marginally app.$0.25 during the morning Platts window yesterday. The cargo premiums also weakened below $2/mt as ample supply in the market continued to depress premiums. The delivered bunker premiums were up slightly app. $7.8 above cargo prices. Bunker fuel oil swaps posted app.$5.00/mt gains at the front of the forward curve both for Rotterdam and Singapore papers. Backend was slightly stronger, gaining up to $7/mt. This morning both markets are trading down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Sep Oct Nov Q113 Q213 2013 NYMEX WTI Swap (1st month) 0.58 96.84 ↑ 96.97 97.31 97.69 98.41 98.08 97.70 ICE Brent Swap (1st month) 0.94 114.64 ↓ 114.04 113.56 113.16 112.01 110.45 113.17 ICE Gasoil Swap (1st month) 9.75 988.75 ↓ 984.42 983.25 980.33 967.36 952.67 950.77 3.5% Barges FOB Rtdm 10.50 652.50 ↓ 649.75 647.50 645.00 639.00 632.25 628.50 3.5% Cargoes FOB Med 5.50 648.75 ↓ 645.25 643.00 640.25 634.50 628.00 624.50 1.0% Cargoes FOB NWE 5.25 711.25 ↓ 702.25 695.00 689.00 675.75 668.25 664.25 3% no. 6 USGC WB 0.75 101.15 ↑ 101.50 101.00 100.75 98.75 97.75 98.25 380 CST Cargoes FOB S'pore - 670.00 ↓ 669.75 667.75 666.50 661.50 654.75 651.00 0.1 % GO Barges FOB Rtdm 10.00 985.75 ↓ 984.25 983.25 981.25 968.25 954.25 952.25 Physical Rotterdam 380 CST 9.00 659.00 ↓ 660.00 657.75 655.25 649.25 642.50 638.75 Physical Singapore 380 CST - 678.50 ↓ 680.00 678.00 676.75 672.25 665.50 661.75

Focus of the day: Singapore

Singapore's onshore fuel oil stocks have fallen more than 16% week-on-week. Data showed levels at 17.8 million barrels for the last week, down from 21.259 million barrels the week before, leaving stocks at a three-week low. Traders attributed much of the fall to demand for fuel oil from China's independent 'teapot' refiners. Western fuel oil arbitrage cargoes arriving in Singapore are expected to total around 4 million metric tonnes in August with similar volumes expected in September. There were good avails of bunker fuels at Asian hubs on Tuesday and prices show relatively little movement. In Singapore, the price of 380cst grade gained $1.50 to $673.50/mt while marine gas oil (MGO) fell $2.50 to $988.50/mt. Demand was below average and supplies were fine. August 26 was the earliest date for deliveries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual FOMC Minutes High 22-Aug 2:00 PM 31-Jul - - - MBA Mortgage Index Medium 22-Aug 7:00 AM 18-Aug NA -4.5% - Existing Home Sales Medium 22-Aug 10:00 AM Jul 4.3M 4.37M - Initial Claims Medium 23-Aug 8:30 AM 18-Aug 365K 366K - New Home Sales Medium 23-Aug 10:00 AM Jul 375K 350K - Durable Orders High 24-Aug 8:30 AM Jul 3.5% 1.3% - Durable Orders- ex Transportation Medium 24-Aug 8:30 AM Jul 0.0% -1.4% -

Source: OW Risk Management