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

Yesterday Oil rallied strongly amid escalating tension between Ukraine and Russia, the world’s largest energy exporter.  WTI closed $2.33 higher at $104.92/bbl while Brent climbed $2.13 to settle at $111.20/bbl. Amid possible sanctions diplomats were considering there was no mention on an  embargo of Russian energy exports by the US and EU (similar to the sanctions currently in place against Iran). The toughest economic measures currently being considered, according to the press, are sanctions against Russian banks and freezes of Russian assets. Other steps could include cancelled participation in the G-8 summit in Russia in June; kicking out Russia from membership in the G-8; and US suspension of talks on a possible trade agreement with Russia. Nevertheless diplomacy is favoured before sanctions. As fresh price highs can not be ruled out, but sustaining price gains in WTI above $105 or Brent north of $112 will be significantly challenged by a record speculative long positions on Crude  that had existed prior to this weekend’s developments. This morning - as Russian troops were ordered to go back to their caserns by the 07th Mar- tension is easing. Oil is trading down -1,4% for Brent and -1,2% for WTI.

Fueloil Specifics

The bunker fuel oil prices jumped yesterday in all Northwest European ports following rally in Brent. Delivered 380cst product in Rotterdam and Antwerp was assessed nearly $14/mt higher vs previous close. Suppliers reported continuously tight LSFO avails keeping premiums high for prompt deliveries. Singapore fuel oil markets rebounded on the back of a stronger crude market on Monday and 380FO Apr14 where valued at 611.00/mt during Asian Platts window hours up app. $ 13/mt from Fridays MOC. Physical premium of the 380cst grade edged down 7cent a tonne to Spore spot quotes and delivered 380cst were seen in a huge range mainly due to volatile crude prices and less demand from buyers of bunker fuel.  Delivered 380cst FO range were seen from 595/mt to 615/mt and a few stems even higher.  Bunker Ex-wharf 380cst were assessed up 12/mt at 616/mt from Friday’s close. This morning both markets are trading down.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Mar Apr May Q214 Q314 Q414 NYMEX WTI Swap (1st month) 2,33 104,92 ↓ 103,56 102,74 100,51 101,63 98,39 95,59 ICE Brent Swap (1st month) 2,13 111,20 ↓ 109,66 109,29 108,94 108,92 107,30 105,60 ICE Gasoil Swap (1st month) 20,00 940,75 ↓ 925,25 922,75 919,42 919,14 909,83 902,03 3.5% Barges FOB Rtdm 9,75 590,75 ↓ 582,75 582,25 581,50 581,50 579,25 574,25 3.5% Cargoes FOB Med 6,25 587,25 ↓ 581,50 580,25 579,25 579,25 576,50 571,50 1.0% Cargoes FOB NWE 22,50 654,00 ↓ 636,75 624,75 619,25 620,25 612,50 603,00 3% no. 6 USGC WB 1,45 91,90 ↓ 90,90 90,93 91,08 90,83 90,45 87,96 380 CST Cargoes FOB S'pore 11,50 612,25 ↓ 602,50 602,50 601,75 601,75 600,25 597,50 0.1 % GO Barges FOB Rtdm 18,75 938,25 ↓ 926,25 924,25 920,25 921,25 914,25 907,25 Physical Rotterdam 380 CST 14,00 595,00 ↓ 588,00 587,50 586,75 586,75 584,50 579,50 Physical Singapore 380 CST 12,50 618,25 ↓ 609,00 607,75 607,00 607,00 605,50 602,75

Focus of the day: ARA

Last week for sure has been a geo-political roller coaster. The Kiev-crisis, pushing up crude levels outside the normal volatility range, caught quite a few suppliers off guard. Add to that general tightness in the ARA market and we’re looking at risky business. It is advised to order bunkers timely, as suppliers are not keen on short term commitment. The low sulphur premium has surged close to 70 dollars, bringing us almost to the all-time highs recorded in 2011. Delivered prices are getting in a new zone now, and may push the 80 dollar level easily. Be careful, buy early and still anticipate on delays here as there is no drop of low sulphur oil to be readily found in the ARA at the moment. Gasoil discounts remain low and still no change foreseen as the market is well supplied. Notification periods for the different grades; five days for high sulphur enquiries and eight working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Personal Income Medium 3-Mar 8:30 AM Jan 0.2% 0.0% 0.3% PCE Prices- Core Medium 3-Mar 8:30 AM Jan 0.1% 0.1% 0.1% ISM Index High 3-Mar 10:00 AM Feb 51.0 51.3 53.2 ADP Employment Change Medium 5-Mar 8:15 AM Feb 150K 175K - ISM Services High 5-Mar 10:00 AM Feb 53.5 54.0 - Initial Claims Medium 6-Mar 8:30 AM 01-mar 335K 348K - Productivity- Rev. Medium 6-Mar 8:30 AM Q4 2.5% 3.2% - Factory Orders Medium 6-Mar 10:00 AM Jan -0.3% -1.5% - Nonfarm Payrolls High 7-Mar 8:30 AM Feb 165K 113K - Unemployment Rate High 7-Mar 8:30 AM Feb 6.5% 6.6% - Trade Balance Medium 7-Mar 8:30 AM Jan -$37.0B -$38.7B -

Source: OW Risk Management