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 continued to see strong price support in the US as the Brent to WTI spread moved into negative territory for the first time during the last 2 years. The change looks structural as logistic improvements in Cushing relieved the bottleneck and bring down inventory but is probably overdone in terms of pricing. The latest US June Home sales figure showed growth at the highest level  since November 2009, confirming the  revival of the US real estate sector. This is good news for the  US economy. The US Federal Reserve chairman had to be cautious after the last negative market reactions of reduction anticipations and used some crafted words this time to balance his speech and keep all options opened for the tapering of the bond program. Last Friday the August WTI futures expired at $108.46/bbl, edging up +$0.42 and September contract closed at  $108.05/bbl, up +$0.01. The September Brent contract lost $0.63 to $108.07/bbl. The People Bank of China freeing the lending rates floor on borrowing costs -at 30% below the benchmark- is a significant step for the financial sector. The limit on mortgage rates will stay to curb property speculation. This morning, crude is trading up.

Fueloil Specifics

The Northwest European bunker fuel oil markets closed mixed last week. Delivered 380cst product in Rotterdam lost app.$1/mt and was supported by stronger demand. Antwerp on the other hand reported weak demand and higher spot prices, with delivered 380cts product assessed app.$2/mt higher versus previous close. The Singapore fuel oil market was marginally changed ranging between -$0.5 to flat on the Asian Platts window last Friday. The delivered bunker premiums were lower, between +$4.0 to $5.5 above cargo prices as bunker demands said to be mixed. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Aug Sep Oct Q413 Q114 2014 NYMEX WTI Swap (1st month) 0,01 108,05 ↑ 107,72 105,96 104,25 102,60 98,27 94,58 ICE Brent Swap (1st month) (0,63) 108,07 ↑ 107,91 107,14 106,49 105,81 103,86 101,37 ICE Gasoil Swap (1st month) (3,00) 925,75 ↑ 927,00 925,33 921,67 917,75 905,22 885,58 3.5% Barges FOB Rtdm (4,75) 600,25 ↑ 597,50 589,50 586,75 584,25 582,75 574,25 3.5% Cargoes FOB Med (3,50) 601,75 ↑ 591,25 583,75 581,25 576,25 574,75 569,75 1.0% Cargoes FOB NWE (0,50) 600,25 ↑ 607,50 610,25 612,00 610,50 609,50 599,25 3% no. 6 USGC WB (0,56) 91,22 ↑ 92,00 92,00 91,50 91,70 91,00 90,25 380 CST Cargoes FOB S'pore 0,25 606,75 ↑ 606,25 608,00 608,25 608,75 606,00 599,50 0.1 % GO Barges FOB Rtdm (4,75) 924,75 ↑ 928,25 926,25 923,25 918,25 904,25 886,25 Physical Rotterdam 380 CST (1,00) 606,00 ↑ 602,75 594,75 591,00 589,00 587,00 578,50 Physical Singapore 380 CST (0,50) 610,00 ↑ 611,50 613,25 613,50 612,50 609,25 602,75

Focus of the day: Gibraltar

Good avails and fine weather conditions are making a smooth start of the week at the Gibraltar Strait, with only two suppliers running slightly behind schedule on barge deliveries. Prompt requirements are still possible to accommodate for some suppliers, even if others are already fully booked until mid this week. Bunker premiums remain quite competitive in view of growing competition in the hub. CIF Med 3.5% is trading some 12 usd/mt above Rotterdam FOB Barges and the HILO spread keeps narrowing to just 2 usd/mt in the Med, with the premium of CIF Med 1% over FOB NWE 1% at 12 usd/mt. The Med market is trading up this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Existing Home Sales Medium 22-Jul 10:00 AM Jun 5.18M 5.25M - New Home Sales Medium 24-Jul 10:00 AM Jun 470K 476K - Initial Claims Medium 25-Jul 8:30 AM 20-jul 340K 334K - Continuing Claims Medium 25-Jul 8:30 AM 13-jul 2980K -6.902M - Durable Orders High 25-Jul 8:30 AM Jun 3.7% 0.6% - Michigan Sentiment- Final Medium 26-Jul 9:55 AM Jul 84.2 83.9 -

Source: OW Risk Management