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

Despite a dip towards the European close Crude prices managed to sustain a higher close after several trading sessions down. The May WTI contract closed at $93.36/bbl, +$0.66 and Brent at $104.66/bbl, +$0.54. Crude prices remain under pressure with current weak crude oil demand as refineries in Europe and especially Asia go for turnarounds. Interestingly, recent trends have also shown some disconnection between the equities, dollar and crude actions. Asian stocks rose as inflation in China eased: Consumer prices rose 2,1% in March, below expectations, and below a ten-month high of +3,2% in February. On the geopolitical front North Korean workers did not show up today at Gaeseong industrial Zone near the border, increasing speculation that North Korea plans to launch a missile or another atomic test.  Market is gearing up for tomorrow's outcome of the FOMC for short term direction. This morning, crude is trading around +0,40 %.

Fueloil Specifics

The Northwest European bunker fuel oil markets started the week with firming prices and weakening demand. Delivered 380cst product in Rotterdam and Antwerp was assessed app.$5/mt higher versus previous close. Rotterdam port continuously reported tight product avails for prompt deliveries and delays at loading installations that lead to higher premiums. The Singapore fuel oil markets traded flattish during the morning Platts window yesterday. Despite the huge fall in the crude futures, the Singapore fuel oil swaps managed to stay around parity, narrowing the Asian fuel oil crack sharply. The delivered bunker premiums were seen between $8.25 to $9.50 above cargo prices. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. May Jun Jul Q313 Q413 2014 NYMEX WTI Swap (1st month) 0,66 93,36 ↑ 94,04 94,23 94,24 93,96 92,88 90,60 ICE Brent Swap (1st month) 0,54 104,66 ↑ 105,16 104,97 104,68 104,31 103,26 101,04 ICE Gasoil Swap (1st month) 0,75 880,75 ↑ 892,67 895,17 897,17 898,72 898,19 887,69 3.5% Barges FOB Rtdm 4,00 588,00 ↑ 593,25 591,75 590,25 589,00 585,50 577,75 3.5% Cargoes FOB Med 2,25 573,50 ↑ 586,25 586,50 585,00 585,50 579,25 574,75 1.0% Cargoes FOB NWE 1,75 593,25 ↑ 609,25 614,25 617,00 616,50 612,75 605,50 3% no. 6 USGC WB 0,84 93,27 ↑ 93,65 93,40 93,15 93,15 92,15 90,65 380 CST Cargoes FOB S'pore 0,50 618,50 ↑ 617,75 616,00 614,00 613,75 610,50 605,25 0.1 % GO Barges FOB Rtdm 1,00 880,75 ↑ 893,25 896,25 898,25 898,25 897,25 889,25 Physical Rotterdam 380 CST 5,00 593,00 ↑ 600,50 599,00 597,50 596,25 591,75 586,00 Physical Singapore 380 CST (0,50) 626,50 ↑ 625,00 623,25 621,25 621,00 617,75 612,50

Focus of the day: ARA

The market has been in roller coaster mode for the past week. We got treated on a daily volatility of 2% on the flat-price over the last five trading days. This presented some interesting opportunities for both buyers and sellers. It all came down to timing, insight and nerve. This resulted in offers varying hugely by the different suppliers. It was easy to tell who saw a strong market and who were the early adopters for the bears. Therefore it is hard to tell if products are under pressure, or tightly supplied or prices are just a result of macro-economic direction. So far market still shows heavy volatility, in other words; happy trading! The high sulphur market does not reveal too much regarding strength or weakness, as described above. However the low sulphur premium seems to be coming down quite a bit, with prints less than 10 dollars. This implies that it is becoming harder to beat the benchmarks there, since psychology comes into play and suppliers don’t want to sell too short to the high sulphur products. This might be an interesting time to fix premiums for the buyers who mainly sail in the ECA-areas and thus are heavily exposed to this spread. The downside is less than 10 dollars, whereas the upside historically is more than 70 dollars. The gasoil market remains unchanged. Even though one big gasoil producer turns up as a buyer at the moment, the discounts don’t seem to be affected by this.  Notification periods for the different grades; four days for high sulphur enquiries and four working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Medium 09-apr 10:00 AM Feb 0.5% 1.2% - Treasury Budget Medium 10-apr 2:00 PM Mar -$107.0B -$198.2B - Initial Claims Medium 11-apr 8:30 AM 06-apr 355K 385K - Continuing Claims Medium 11-apr 8:30 AM 06-apr 3050K 3063K - Retail Sales High 12-apr 8:30 AM Mar 0.0% 1.1% - Core PPI High 12-apr 8:30 AM Mar 0.2% 0.2% - Mich Sentiment High 12-apr 9:55 AM Apr 76.0 78.6 - Business Inventories Medium 12-apr 10:00 AM Feb 0.6% 1.0% -

Source: OW Risk Management