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

Yesterday Crude Oil prices managed to hold the selling pressure, and rebounded towards the close. The September WTI contract closed at $105.49/bbl, up +$0.10 and Brent settled also higher by +$0.46 at $107.65/bbl. Markets were supported by firmer equities coupled with a weaker US dollar which is friendly towards US dollar denominated assets. The US weekly jobless claims were generally within market expectation while the US June durable goods orders saw an increase of +4.2% vs. exp. 2.3%.  In Asia, China ordered to more than 1400 companies in 19 industries to cut excess production capacity this year. The US July Consumer sentiment will be released later today. This morning, crude prices are trading around 0,6% down.

Fueloil Specifics

These have to be the most confusing days that we have experienced in the fuel oil market. Aug/Sep 3,5% Paper Barges traded into double digits overnight (+10 backwardation trading) as the Singapore market continues to be under heavy pressure  (-4.75 contango trading Aug/Sep 180).To put this together, we now have Aug E-W at 5.5/mt, the lowest level we have seen so far. As Singapore is the biggest fuel oil demand center, it is assumed Singapore drives the market rather than Europe. Now clearly market is behaving quite the opposite. Does it makes sense to take oil east in this environment? Some Oil trading company clearly intent on doing so. Maybe they have 10x bigger position on paper, so a leveraging play on the physical loss. Shall we expect negative E-W coming next?   The Singapore fuel oil market fell around -$5.0 during the Platts window tracking yesterday’s crude movements. The Singapore heavy residual inventory saw a build of +1.61 m. bbl. after weeks of draw to 20.53 m. bbl. The delivered bunker premiums were around $6.0 above cargo prices.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Yesterday's Values Forward Indications               Product Change Last Dir. Aug Sep Oct Q413 Q114 2014 NYMEX WTI Swap (1st month) 0,10 105,49 ↓ 104,47 103,37 102,01 100,66 97,88 100,66 ICE Brent Swap (1st month) 0,46 107,65 ↓ 106,67 105,94 105,34 104,80 103,24 101,10 ICE Gasoil Swap (1st month) (0,50) 913,75 ↓ 912,83 912,58 910,42 907,14 896,89 879,75 3.5% Barges FOB Rtdm 0,00 599,25 ↓ 596,00 586,25 582,50 581,75 581,25 573,50 3.5% Cargoes FOB Med 1,50 597,25 ↓ 5,25 19,75 17,25 575,50 576,00 569,75 1.0% Cargoes FOB NWE (2,00) 657,50 ↓ 603,00 605,25 607,00 606,75 608,00 600,00 3% no. 6 USGC WB 0,44 92,43 ↓ 91,73 91,40 91,17 90,97 90,77 89,70 380 CST Cargoes FOB S'pore (5,50) 596,50 ↓ 597,00 599,75 600,50 601,75 601,50 595,00 0.1 % GO Barges FOB Rtdm (0,25) 912,50 ↓ 913,25 913,25 910,25 908,25 896,25 879,25 Physical Rotterdam 380 CST 1,00 603,25 ↓ 606,25 596,50 592,75 591,00 590,50 583,75 Physical Singapore 380 CST (5,00) 603,00 ↓ 607,25 610,00 610,75 611,50 611,25 605,75

Focus of the day: Piraeus

Piraeus and Istanbul were busy this week. The market was softer and the dropping prices sparked buying interest. In Piraeus, except from the liner and cruiser vessels' steady demand, there was an increase in the spot market demand, with a larger number of vessels calling Piraeus anchorage for bunkers only. All grades of high and low sulphur fuel oil are available in Piraeus and barges are able to meet the increased demand, which is customary for this time of the year. Istanbul was very competitive this week as well, with levels for HSFO 380 being only $ 5.00-8.00 on average higher than Piraeus.

Economy fundamentals this week

Fundamental Indicators Fundamental Indicators               Statistic Importance Date Time Period Consensus Last Actual Existing Home Sales Medium 22-jul 10:00 AM Jun 5.18M 5.25M 5.08M New Home Sales Medium 24-jul 10:00 AM Jun 470K 476K 497K Initial Claims Medium 25-jul 8:30 AM jul-13 340K 334K 343K Continuing Claims Medium 25-jul 8:30 AM 13-jul 2980K -6.902M 2997K Durable Orders High 25-jul 8:30 AM Jun 3.7% 0.6% 4,20% Michigan Sentiment- Final Medium 26-jul 9:55 AM Jul 84.2 83.9 -

Source: OW Risk Management