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

OPEC meeting happened yesterday and, as expected, they left the current quota intact. Saudi Arabia, however, is aiming to stabilize prices around $100 and continue with the supplies given the geopolitical uncertainties and the higher call on OPEC crude in H2. However, should the need arise; we do not doubt that Saudi Arabia would cut production aggressively to help shore up prices. Muted reaction from the market as Europe continues to dominate sentiment and market direction. The annual publication of the BP statistical review, with the 2012 version being published yesterday, statistics confirm the trend of increasing energy demand, with world total energy consumption up by 2.5% y/y, which is lower than the 3.8% growth seen in real global GDP. The US driving season has begun, taking gasoline demand back above 9 mb/d for the first time since August 2011. The divergence between crude and product inventories continues as the formal builds and the latter draws relative to seasonal averages. OPEC meets today. Front Brent trading up +0.58% at 97.75.

Fueloil Specifics

The NWE fuel oil prices remained largely unchanged Thursday. Rotterdam delivered 380cst product was up app. $2/mt supported by ongoing tightness in product avails while cargo prices posted app.$3.5/mt gains. Antwerp port also reported tight product avails for prompt deliveries, especially for LSFO. Asia's fuel oil market was largely steady on Thursday, with the June/July and July/August intermonth spreads remaining little changed, but the cash premium for the 380cst grade inched up on buying in the physical market. Going forward, fundamentals are due to strengthen as thinner Western arbitrage imports are expected to arrive in Asia in July. Reflecting the strength, the July/August spread, which turns prompt next Monday as the market enters the July pricing month, was steady above the $5 mark. Yesterday delivered 380cst in Singapore was around $585/mt. Bunker fuel oil swaps yesterday posted app.$2/mt gains at the front of the forward curve for both Rotterdam and Singapore papers. Backend was weaker, loosing nearly $2/mt. this morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jul Aug Sep Q312 Q412 2013 NYMEX WTI Swap (1st month) 1.29 83.91 ↑ 84.98 85.26 85.57 85.27 85.93 85.93 ICE Brent Swap (1st month) (0.10) 97.17 ↑ 97.81 97.75 97.65 97.73 97.50 97.50 ICE Gasoil Swap (1st month) (2.75) 844.75 ↑ 849.25 846.25 845.67 847.06 844.50 843.62 3.5% Barges FOB Rtdm 3.50 579.50 ↑ 575.75 570.25 566.00 570.75 559.75 549.25 3.5% Cargoes FOB Med 0.25 582.25 ↑ 574.25 567.50 562.50 568.25 556.25 545.25 1.0% Cargoes FOB NWE (4.25) 657.50 ↑ 599.75 596.50 593.00 596.50 587.00 579.75 3% no. 6 USGC WB 1.57 89.90 ↑ 89.81 89.23 88.73 87.95 87.20 86.34 380 CST Cargoes FOB S'pore 0.75 599.50 ↑ 604.50 598.25 593.00 598.50 587.00 574.75 0.1 % GO Barges FOB Rtdm (5.00) 850.00 ↑ 849.25 847.25 846.25 848.25 844.25 843.25 Physical Rotterdam 380 CST 2.00 588.75 ↑ 586.00 580.50 576.25 581.00 570.00 559.50 Physical Singapore 380 CST (0.50) 605.25 ↑ 614.75 608.50 603.25 609.25 597.75 585.50

Focus of the day: Piraeus

This week Piraeus market was fairly active. Crude market was flat all week and bunker prices remained at relatively low levels. There was a number of large volume enquiries mainly for cruisers and liners in the market this week and some suppliers have reported to be fully committed until the beginning of next week. MOH refinery has undertaken another major cargo export and no barge loadings can be accommodated until further notice; the situation is expected to be resolved next week, when the export will be completed. For the time being barges can only load from Hellenic Petroleum refinery and this could cause product tightness; at the moment, though, suppliers have been able to quote even for prompt enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Export Prices Medium 12-Jun 8:30 AM May NA 0.2% -0.5% Import Prices Medium 12-Jun 8:30 AM May NA 0.1% -0.1% Treasury Budget Medium 12-Jun 2:00 PM May NA -$57.6B -$124.6B Retail Sales High 13-Jun 8:30 AM May -0.3% 0.1% -0.2% PPI Medium 13-Jun 8:30 AM May 0.1% 0.2% 0.2% Business Inventories Medium 13-Jun 10:00 AM Apr 0.2% 0.3% 0.4% Initial Claims Medium 14-Jun 8:30 AM 09-Jun 375K 377K 386K CPI High 14-Jun 8:30 AM May 0.1% 0.2% 0.2% Empire Manufacturing Medium 15-Jun 8:30 AM Jun 10.0 17.1 - Industrial Production Medium 15-Jun 9:15 AM May 0.1% 1.1% - Capacity Utilization Medium 15-Jun 9:15 AM May 79.2% 79.2% - Michigan Sentiment High 15-Jun 9:55 AM Jun 77.0 79.3 -

Source: OW Risk Management