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 closed lower yesterday. Trading volume was lighter than usual due to public holiday in the UK. Crude prices were under pressure after the Chinese April Manufacturing data came out at 48,1 vs 48,4  exp. -showing contraction for the 4th straight month- raising concern on the economy. However, prices remain supported with more internal fighting in Ukraine between the Ukrainian government and pro-Russian separatists. The June WTI future slipped -$0.28 to close at $99.48/bbl and Brent fell -$0.87 to $107.72/bbl. Today the market will be looking at the US Mar Trade Balance and the API weekly stocks number later in the day. This morning, crude prices are trading a few cents up.

Fueloil Specifics

The Northwest European bunker fuel oil prices remained largely unchanged at the beginning of the week. Suppliers reported continuously tight avails especially for lsfo products mainly due to congestions at loading installations. The Singapore fuel oil prices opened the week, up more than +$1.0 during the Platts window. The latest Singapore heavy residual inventory reported a build of +2.01 mbbl to 22.38 mbbl. The delivered bunker premiums were between $5.00 and $8.25 above cargo prices yesterday. This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. May Jun Jul Q314 Q414 Q115 NYMEX WTI Swap (1st month) (0,28) 99,48 ↑ 99,38 98,56 96,73 96,73 96,73 94,22 ICE Brent Swap (1st month) (0,87) 107,72 ↑ 107,56 106,98 106,35 105,73 104,23 102,23 ICE Gasoil Swap (1st month) (11,50) 898,00 ↑ 901,50 899,42 897,92 897,75 892,25 - 3.5% Barges FOB Rtdm - 567,00 ↓ 568,50 569,25 569,00 567,50 562,75 561,50 3.5% Cargoes FOB Med - 571,00 ↓ 567,50 567,00 566,00 561,50 559,75 558,00 1.0% Cargoes FOB NWE - 605,25 ↓ 605,75 604,25 601,75 599,00 588,75 579,75 3% no. 6 USGC WB (0,12) 91,31 ↑ 89,70 88,80 88,50 88,28 87,51 87,11 380 CST Cargoes FOB S'pore 1,25 584,75 ↓ 586,25 588,75 589,00 588,00 586,00 585,00 0.1 % GO Barges FOB Rtdm - 907,50 ↑ 902,25 900,25 898,25 897,25 892,25 - Physical Rotterdam 380 CST - 573,75 ↓ 573,75 574,50 574,25 572,75 568,00 566,75 Physical Singapore 380 CST - 590,50 ↓ 591,50 594,00 594,25 593,25 591,25 590,25

Focus of the day: ARA

With Labour Day and a bank holiday in the UK included, it has been a quiet start of the week. May has started with a bit more contango on the high sulphur, which is also reflected in the fuel cracks coming off a bit further. Thus the high sulphur remains well supplied. No changes foreseen on a short notice. We cheered too early last week regarding the low sulphur. Recent history repeats itself with various players not fulfilling their short term obligations towards suppliers, leaving them with dry barges and headaches. The low sulphur premium jumped around 15 dollars to the mid-sixties. Buy your low sulphur well in advance! With regards to the gasoil, it was a pretty flat week, discounts hover sideways. Lower density grades are well supplied. Notification periods for the different grades; four days for high sulphur enquiries and six working days for low sulphur; three days for gasoil.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual ISM Service Medium 5-May 10:00 AM Apr 54.0 53.1 55.2 Trade Balance Medium 6-May 8:30 AM Mar -$42.5B -$42.3B - Initial Claims Medium 8-May 8:30 AM 3-May 325K 344K - Wholesale Inventories Medium 9-May 10:00 AM Mar 1.1% 0.5% - JOLTS- Job Openings Medium 9-May 10:00 AM Mar NA 4.173M -

Source: OW Risk Management