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

After a slight rally in the early morning hours, crude prices dropped when the US and European sanctions on Monday were confined to a few selected Russian and Ukrainian officials, leaving oil exports untouched. Brent futures dropped to a 5 week low yesterday and closed at $106.24/bbl, down -$1.97 while the April WTI contracts lost -$0.81 to settle at $98.08/bbl. With the tensions easing over the situation in Ukraine, attention turned to ample global supplies and weakening demand. Today all eyes will be on the API oil inventories and the outcome of the Federal Reserve’s meeting starting today. This morning, crude is trading some +0.15% higher.

Fueloil Specifics

Bunker fuel oil prices in the NWE region dropped significantly following weakening Brent. Delivered 380cst product in the main ports of Rotterdam and Antwerp was assessed nearly $6/mt down vs previous close. Suppliers reported relatively low trading activity with premiums for LSFO prompt deliveries remaining on the higher side amidst tight avails from loading bays. The Singapore fuel oil prices were up app. $1.0 during the Asian Platts window yesterday. Market demand was slow initially but picked up in the latter session as crude prices softened. The delivered bunker premiums remained around +$4.5 to $6.0. This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Apr May Jun Q314 Q414 Q115 NYMEX WTI Swap (1st month) (0,81) 98,08 ↑ 97,55 96,84 96,09 96,83 94,51 92,36 ICE Brent Swap (1st month) (1,97) 106,24 ↑ 106,23 105,94 105,58 105,09 104,61 102,35 ICE Gasoil Swap (1st month) (12,25) 889,50 ↓ 888,00 888,83 888,83 887,86 883,78 - 3.5% Barges FOB Rtdm (7,00) 571,00 ↓ 572,75 572,25 571,75 570,25 566,25 564,50 3.5% Cargoes FOB Med (7,00) 568,25 ↓ 570,75 570,50 570,00 568,00 564,00 563,00 1.0% Cargoes FOB NWE (8,75) 623,25 ↓ 603,25 599,25 598,25 596,25 590,25 581,50 3% no. 6 USGC WB (1,18) 88,32 ↑ 89,15 89,00 89,13 88,63 88,04 87,69 380 CST Cargoes FOB S'pore 1,25 598,00 ↓ 593,25 593,00 592,25 591,25 589,25 587,50 0.1 % GO Barges FOB Rtdm (12,00) 887,50 ↓ 889,25 890,25 890,25 889,25 885,25 - Physical Rotterdam 380 CST (6,00) 573,00 ↓ 578,00 577,50 577,00 575,50 571,50 569,75 Physical Singapore 380 CST 0,00 603,25 ↓ 598,50 598,25 597,50 596,50 594,50 592,75

Focus of the day: ARA

The Ukraine-crisis is fuelling major swings on the crudes, but, just as last week, the fuel crack is also volatile making sure there’s ‘only’ a 8 USD range in which the heavy fuels move. Demand is still lacking a bit, reflecting in low levels compared to paper being paid for bunkers. It looks like there is still some length on high sulphur in the market, so even very prompt enquiries can go at surprisingly low levels. The story for the low sulphur remains unchanged. Trading houses, even delivering very low viscosity products (hence big quality ‘give-away’), can meet their obligations. The low premium came off just a tad, hovering around 65 dollars now, however trouble foreseen until the end of month at least. Gasoil discounts remain low and still no change foreseen as the market is well supplied. Notification periods for the different grades; four days for high sulphur enquiries and five working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire Manufacturing Medium 17-Mar 8:30 AM Mar 2.0 4.5 5.6 Industrial Production Medium 17-Mar 9:15 AM Feb -0.1% -0.3% 0.6% Housing Starts Medium 18-Mar 8:30 AM Feb 875K 880K - Building Permits Medium 18-Mar 8:30 AM Feb 945K 937K - Core CPI High 18-Mar 8:30 AM Feb 0.1% 0.1% - FOMC Rate Decision High 19-Mar 2:00 PM Mar 0.25% 0.25% - Initial Claims Medium 20-Mar 8:30 AM 15-mar 330K 315K - Existing Home Sales Medium 20-Mar 10:00 AM Feb 4.55M 4.62M - Philadelphia Fed Medium 20-Mar 10:00 AM Mar 2.0 -6.3 - Leading Indicators Medium 20-Mar 10:30 AM 15-mar 0.2% 0.3% -

Source: OW Risk Management