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 soft but gained traction during the trading session. Crude Oil prices surged more than $3 yesterday going into the US close. The December WTI Oil contract gained +$3.06, $88.71/bbl and Brent settled at $111.07/bbl, up $3.34. The crude futures are driven by the US election results and- as I am writing- it seems that Obama will be president for four more years. In economic terms it will probably be the same politic with the actual QE 3 working into the system; it should weaken the USD in the next months and therefore be supportive for Oil price. So far Equity reaction to the election is positive bringing some level of optimism in the market but it could be short lived. The US Energy department will be releasing the inventory report later today and the expectations are as follows: Crude +1.8 mbbl, Distillates -1.5 mbbl, Gasoline -1.0 mbbl. This morning, crude prices are trading down.

Fueloil Specifics

The NWE bunker fuel oil prices firmed yesterday following stronger Brent. Delivered 380cst product in Rotterdam as assessed up by app.$13/mt while cargo prices were even stronger, up more than $15/mt. Higher prices prompted buying interest in the area. Rotterdam still reports firmer prices for prompt hsfo due to ongoing delays at loading installations. The Singapore fuel oil markets were only up $2.0- 5.5 during the Platts window yesterday. The Asian fuel oil crack weakened significantly during the window with strong selling interest. The delivered bunker premiums were around $4.0-5.0 above cargo prices. Bunker fuel oil swaps gained app.$14/mt at the front and a dollar more at the backend of the forward curve both for Rotterdam and Singapore papers. This morning both markets continue trading up.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Dec Jan Feb Q113 Q213 2013 NYMEX WTI Swap (1st month) 3.06 88.71 ↓ 89.07 89.64 90.06 90.01 91.23 91.28 ICE Brent Swap (1st month) 3.34 111.07 ↓ 109.42 108.78 108.30 108.32 106.95 106.32 ICE Gasoil Swap (1st month) 14.50 937.00 ↑ 948.42 946.33 943.08 942.14 929.94 928.60 3.5% Barges FOB Rtdm 15.50 584.25 ↑ 593.75 597.25 598.25 598.00 599.75 597.00 3.5% Cargoes FOB Med 15.25 579.25 ↑ 584.50 589.75 588.50 591.25 593.75 591.00 1.0% Cargoes FOB NWE 12.25 615.25 ↑ 625.25 628.50 629.00 629.00 630.50 627.75 3% no. 6 USGC WB 2.28 94.25 ↓ 93.98 93.33 93.66 94.09 93.89 93.81 380 CST Cargoes FOB S'pore 2.25 594.00 ↑ 618.50 620.50 621.50 621.50 623.50 621.00 0.1 % GO Barges FOB Rtdm 14.50 935.00 ↓ 948.25 946.25 944.25 943.25 931.25 930.25 Physical Rotterdam 380 CST 13.00 591.00 ↑ 604.00 607.50 608.50 608.25 610.00 607.25 Physical Singapore 380 CST 0.50 599.00 ↑ 628.75 630.75 631.75 632.25 634.25 631.75

Focus of the day: Singapore

Singapore's onshore residual fuel oil stocks have fallen. Data published showed inventories declined 7% week-on-week. Stocks dropped by 1.53 million barrels to 20.5 million. Arbitrage arrivals from the West were down 25% compared to the previous week. Nevertheless, traders said they expected stocks level to remain high with heavy western arbitrage fuel oil volumes in the first half of November. Bunker prices were generally firming across key Asian ports on Tuesday after a weak start the day before. Singapore's price of benchmark 380cst bunker fuel gained $4.50 to average at $601/mt on Tuesday. Marine gas oil was pegged $8 higher at $925.50/mt, data showed. Demand was "low" to "pretty good" on Tuesday while supplies were sufficient, traders said. Earliest deliveries were available from November 11-12 onwards, depending on the supplier.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual ISM Service Medium 05-Nov 10:00 AM Oct 54.5 55.1 54.2 MBA Mortgage Index Medium 07-Nov 7:00 AM 03-Nov NA -4.8% - Consumer Credit Medium 07-Nov 3:00 PM Sep $10.0B $18.1B - Initial Claims Medium 08-Nov 8:30 AM 03-Nov 370K 363K - Trade Balance Medium 08-Nov 8:30 AM Sep -$45.4B -$44.2B - Michigan Sentiment Medium 09-Nov 9:55 AM Nov 83.5 82.6 - Wholesale Inventories Medium 09-Nov 10:00 AM Sep 0.7% 0.5% -

Source: OW Risk Management