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 prices had a strong start during the European session jumping nearly two dollars boosted by a stronger Chinese export data at a 7 months high. Market was also-surprisingly- boosted by Saudi Arabia announcement that they had cut output in December to the lowest in 19 months which looks more like an oversupply market. Remeber, that Saudi Arabia needs a Brent barrel level to $90 for their budget. They will need to cut more probably 500k b/d if they do not want to be in “trouble”. The European Central Bank  kept  interest rate unchanged at 0.75%.and so did the Bank of England. Market lost momentum and lost all the gains going into the close. The February WTI futures closed at $94./bbl, up +$0.74 and  Brent only managed to inch up $0.13 to $111.89. China’s inflation accelerated more than forecasted to a seven month high of 2,5% making it difficult to lower rates. Today the November UK Industrial Production came out lower at 0,3% vs 0,8% exp. confirming a weak Q4 in Europe. This morning, crude is trading down.

Fueloil Specifics

The NWE fuel oil markets edged higher yesterday supported by stronger crude values. Both delivered 380cst product in Rotterdam and cargo prices were assessed app.$7.00-8.00/mt higher than previous day. However, firming prices did not increase buying interest as players were still monitoring the market. Rotterdam and Antwerp still report tight LSFO avails for prompt deliveries due to operational delays. The Singapore fuel oil market prices increased more than $5.5 during the Platts window yesterday. The Asian Fuel Oil cracks firmed yesterday as strong buying continued to support cracks. The delivered bunker premiums maintained between $4.5-6.5 above cargo prices. This morning both markets are trading lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q213 Q313 2013 NYMEX WTI Swap (1st month) 0,72 93,82 ↓ 94,11 94,52 94,84 94,99 95,20 94,47 ICE Brent Swap (1st month) 0,13 111,89 ↓ 110,23 109,62 109,07 108,53 106,77 107,66 ICE Gasoil Swap (1st month) - 959,25 ↓ 948,83 943,42 938,00 933,53 924,53 928,92 3.5% Barges FOB Rtdm 8,00 619,00 ↓ 609,00 607,50 605,75 605,25 600,25 603,75 3.5% Cargoes FOB Med 10,00 619,75 ↓ 603,75 602,25 601,25 600,50 595,50 599,00 1.0% Cargoes FOB NWE 7,25 647,75 ↓ 643,00 641,50 640,00 639,50 634,00 636,75 3% no. 6 USGC WB (0,28) 95,62 ↓ 96,20 95,95 95,45 94,95 94,20 94,70 380 CST Cargoes FOB S'pore 6,75 638,50 ↓ 633,50 631,75 630,00 629,00 624,50 627,75 0.1 % GO Barges FOB Rtdm 10,50 959,00 ↓ 949,25 944,25 938,25 935,25 924,25 928,25 Physical Rotterdam 380 CST 7,00 621,00 ↓ 616,25 614,75 613,00 612,50 607,50 611,00 Physical Singapore 380 CST 7,00 644,00 ↓ 640,75 639,00 637,25 636,25 631,75 635,00

Focus of the day: Piraeus

The second week of the year was rather slow in Piraeus and the rest of the Mediterranean. Crude market was bullish but the rising prices did not boost demand as much as expected. On the supply side, Piraeus experienced some tightness in HSFO as MOH refinery undertook a major export this week and did not accommodate barge loadings, except for very small lots. The export has now finished and barge loadings have resumed in MOH refinery; loadings at Hellenic Petroleum Refinery were smooth throughout the week. Barge availability was very good and only one supplier has reported to be fully committed until the 15th.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Credit Medium 08-jan 3:00 PM Nov $8.0B $14.2B $16.0B MBA Mortgage Index Medium 09-jan 7:00 AM 05-jan NA NA 11.7% Initial Claims Medium 10-jan 8:30 AM 05-jan 365K 372K 371K Wholesale Inventories Medium 10-jan 10:00 AM Nov 0.2% 0.6% 0.6% Trade Balance Medium 11-jan 8:30 AM Nov -$45.0B -$42.2B - Treasury Budget Medium 11-jan 2:00 PM Dec NA -$86.0B -

Source: OW Risk Management