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

Brent holds the gains above $116 on a strong US PMI number and markets seem pricing in more optimistic news in the world economy. Main drivers of the improvement in January were strong services sector sentiment in China, as well as above-expectations increases in the Euro area and UK services activity. Strong manufacturing momentum across almost all regions provides support to global business activity. Todays EIA report could offer some bearish news, but within present environment statistics tend to be largely overshadowed by a bullish stock market and a weak dollar. The expectations are as follows: Crude 2,77mbbl, Distillates -1,04mbbl and Gasoline -0,04mbbl. Ahead of the week lies Spanish bond auction, ECB policy meeting and unless we see better than expected Chinese economic data, Friday we should see some price softening into the weekend.

Fueloil Specifics

The NWE bunker fuel oil prices edged higher yesterday afternoon following stronger crude. Delivered 380cst product in Rotterdam was assessed app.$5/mt up from previous day’s close. Main ARA ports saw healthy demand levels in the morning however; interest disappeared in the afternoon after prices moved higher. Singapore 380cst delivered product yesterday was trading around 648.00/mt and healthy demand was seen from many players here before Chinese New Year. Asia fuel oil intermonth spreads rebounded, with sentiment boosted by buying interest during the trading window. Singapore Jan imports had increased 14% to around 6.5 million and imports this month may likely drop around 40%. Downside for fuel oil could be capped by upcoming refinery maintenance season in March and April.  This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Mar Apr May Q213 Q313 Q413 NYMEX WTI Swap (1st month) 0,47 96,64 ↓ 96,84 97,30 97,71 97,66 97,97 97,19 ICE Brent Swap (1st month) 0,92 116,52 ↓ 115,04 114,21 113,49 113,50 111,33 109,29 ICE Gasoil Swap (1st month) 6,50 1010,50 ↓ 991,83 982,00 973,58 974,64 960,50 949,75 3.5% Barges FOB Rtdm 2,25 636,50 ↓ 631,00 629,50 627,75 627,75 623,00 618,00 3.5% Cargoes FOB Med 3,25 624,50 ↓ 623,25 623,00 622,00 622,50 618,25 613,50 1.0% Cargoes FOB NWE 7,50 668,75 ↓ 667,50 667,00 665,25 665,25 659,00 650,00 3% no. 6 USGC WB 0,61 99,56 ↓ 99,30 98,80 98,55 98,55 97,80 97,05 380 CST Cargoes FOB S'pore (2,50) 647,50 ↓ 653,00 652,75 651,50 651,00 646,00 641,50 0.1 % GO Barges FOB Rtdm 8,00 1007,75 ↓ 992,25 983,25 974,25 976,25 960,25 949,25 Physical Rotterdam 380 CST 5,00 642,75 ↓ 638,25 636,75 635,00 635,00 630,25 625,25 Physical Singapore 380 CST (3,50) 652,50 ↓ 660,75 660,50 659,25 658,75 653,75 649,25

Focus of the day: Singapore

Singapore's onshore residual fuel oil stocks were climbing this week. They jumped more than 17% to reach an eight-week high of 20.645 million barrels. Observers said imports from Western countries continued to be high at around 487,000mt. Exports to China, meanwhile, fell by more than 60% against a background of weak demand from independent 'teapot' refineries. Exports to South Korea were also down after several weeks of relatively strong demand from the country's electricity generating sector. Prices for intermediate fuel oil (IFO) were falling in Asian bunker hubs on Tuesday. In Singapore, the price of benchmark 380cst bunker material lost app.$2 to average $648.00/mt. Marine gas oil softened by $2 to $974.50/mt. Demand was mostly good and supplies were fine. Earliest deliveries were available from February 8-12 onwards.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Factory Orders Medium 04-feb 10:00 AM Dec 3.0% 0.0% 1.8% ISM Services Medium 05-feb 10:00 AM Jan 55.5 56.1 55.2 MBA Mortgage Index Medium 06-feb 7:00 AM 02-feb NA -8.1% - Initial Claims Medium 07-feb 8:30 AM 02-feb 365K 368K - Continuing Claims Medium 07-feb 8:30 AM 26-jan 3200K 3198K - Consumer Credit Medium 07-feb 3:00 PM Dec $10.0B $16.0B - Trade Balance Medium 08-feb 8:30 AM Dec -$42.5B -$48.7B - Wholesale Inventories Medium 08-feb 10:00 AM Dec 0.7% 0.6% -

Source: OW Risk Management