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 posted some new highs yesterday after six days of gains. The market was driven mainly by the WTI/Brent spread as it weakened after recent narrowing. The softening is due to high crude inventory still reported at Cushing; the delivery point of the WTI futures. The Seaway pipelines which started 2 weeks ago  were unable to reduce the crude stockpile as they are still running below capacity at 175,000 bpd vs expected 400,000 bpd. Furthermore, the IMF has reduced  global growth forecast to 3.5% from 3.6% which further capped gains. The March WTI futures lost -$1.45 to close at $95.23/bbl while the March settled at $112.30/bbl,  up +$0.38. The more widely watched inventory report by the US Energy Department will released later today. The expectations are as follows: Crude +1.75, Distillates +0.42, Gasoline +1.45. This morning, crude is trading close to flat.

Fueloil Specifics

The NWE bunker fuel oil market saw one more quiet day with only slight changes in the prices. Delivered 380cst product in Rotterdam was assessed app. $2/mt up from previous day‘s close. The Singapore fuel oil market prices dropped between -$5.0 to -$1.5 during the morning Platts window yesterday. Market fundamentals remain weak as more incoming cargoes are expected. The February arbitrage estimates are around 3.8 to 4.0 million mt. The delivered bunker premiums were around $5.75-7.50 above cargo prices. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q213 Q313 Q413 NYMEX WTI Swap (1st month) 0,64 95,23 ↑ 95,64 96,10 96,47 96,61 96,13 95,41 ICE Brent Swap (1st month) 0,72 112,80 ↓ 112,05 111,05 110,23 109,55 107,58 107,58 ICE Gasoil Swap (1st month) 5,25 970,75 ↓ 963,08 954,83 947,83 941,47 930,78 920,33 3.5% Barges FOB Rtdm 3,00 611,50 ↑ 610,75 609,75 608,75 607,75 603,50 598,75 3.5% Cargoes FOB Med 1,00 601,50 ↑ 605,00 605,00 604,00 603,50 599,00 594,50 1.0% Cargoes FOB NWE (1,00) 643,25 ↑ 647,75 646,75 645,75 644,50 639,00 631,25 3% no. 6 USGC WB 0,71 96,93 ↓ 96,55 96,05 95,80 94,80 94,05 93,55 380 CST Cargoes FOB S'pore (1,75) 625,50 ↑ 631,75 633,00 632,75 631,75 628,00 623,50 0.1 % GO Barges FOB Rtdm 0,50 971,00 ↓ 963,25 955,25 948,25 942,25 930,25 920,25 Physical Rotterdam 380 CST 2,00 616,25 ↑ 618,00 617,00 616,00 615,00 610,75 606,00 Physical Singapore 380 CST (2,00) 631,75 ↑ 639,00 640,25 640,00 639,00 635,25 630,75

Focus of the day: Houston

The Gulf Coast 3% residual fuel oil market has been weaker relative to the ICE March Brent market as market sources said global crack spreads weakened in the high-sulfur market. The ICE March Brent and Gulf Coast 3% crack spread widened by $1.58/bbl from Friday to minus $16.71/bbl. The Gulf Coast bunker fuel market has been quiet this week so far, with sources agreeing there was very little activity in the region due to a lack of demand. Sources also said high-sulfur fuel oil crack spreads to ICE March Brent were weaker, which could be explained by the lack of demand for bunker fuel. Yesterday Houston levels for 380cst were around $624-626/mt, where the LSFO remained with a premium of $98-100/mt. New Orleans was around $637-640/mt for 380cst with typically the same $100/mt premium for the 380cst 1%.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Existing Home Sales Medium 22-jan 10:00 AM Dec 5.1M 5.04M 4.94M MBA Mortgage Index Medium 23-jan 7:00 AM 19-jan NA 15.2% 7.0% Initial Claims Medium 24-jan 8:30 AM 19-jan 365K 335K - Leading Indicators Medium 24-jan 10:00 AM Dec 0.5% -0.2% - New Home Sales Medium 25-jan 10:00 AM Dec 360K 377K -

Source: OW Risk Management