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 tumbled more than 3% yesterday as market nervousness is growing. The July Crude Oil WTI contract closed at $87.82/bbl down -$2.94 and Brent fell more than $3 to close $103.47. Market sentiment remains extremely cautious as investors flee risk assets to safer one like US Treasury or German/Nordic Bonds. Equities were also much under pressure yesterday . Market is still broadly driven by developments in the Eurozone. The US Energy department will be releasing its Inventory Report later today and expectations are as follows: Crude + 1.0 mbbl, Distillates -0.1 mbbl, Gasoline -1.0 mbbl. Watch the volatile US ADP Unemployment number before the Nonfarm Payroll tomorrow. This morning, crude is trading higher.

Fueloil Specifics

Bunker fuel prices lost approx. $20/mt in the NWE yesterday. Rotterdam 380 cst delivered fuel was a little stronger than cargo but generally moved in line. Supply looks relatively tight yet, though it is off set by a low demand as buyers were not keen on fixing while crude was crashing. The Singapore fuel oil markets extended its weakness by more than $8.5/mt during the Platts window yesterday tracking the crude movement. The June incoming arbitrages are estimated at around 4.0 million mt, quite a decent number. The delivered bunker premiums hovered around $6.25 above cargo prices. Front month bunker fuel swaps lost approx. $22/mt both in Rotterdam and Singapore yesterday. prices were a notch stronger at the backend as 2013 papers lost approx. $18.5/mt while 2014 was down by approx. $14.5/mt. Prices are getting reasonable again esp. at the back of the curve. Both markets are trading higher this morning.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q312 Q412 2013 NYMEX WTI Swap (1st month) (0.10) 87.82 ↑ 88.23 88.55 88.84 88.81 89.39 89.39 ICE Brent Swap (1st month) (3.21) 103.47 ↑ 103.61 103.19 102.73 102.76 101.96 101.96 ICE Gasoil Swap (1st month) (28.50) 882.50 ↑ 880.75 878.67 878.25 878.56 879.53 872.68 3.5% Barges FOB Rtdm (0.25) 599.50 ↑ 594.75 590.25 587.25 587.25 578.75 565.50 3.5% Cargoes FOB Med (0.25) 598.25 ↑ 592.25 586.50 583.00 583.00 574.25 560.75 1.0% Cargoes FOB NWE (1.00) 657.50 ↑ 632.00 629.25 626.00 625.75 613.75 599.75 3% no. 6 USGC WB (1.50) 92.68 ↑ 92.60 92.20 91.80 90.70 89.85 88.66 380 CST Cargoes FOB S'pore (9.00) 635.50 ↑ 622.75 618.25 615.00 616.00 607.00 592.00 0.1 % GO Barges FOB Rtdm (29.25) 882.25 ↑ 881.25 879.25 878.25 880.25 879.25 872.25 Physical Rotterdam 380 CST (19.00) 607.25 ↑ 605.00 600.50 597.50 597.50 589.00 575.75 Physical Singapore 380 CST (9.50) 642.75 ↑ 633.00 628.50 625.25 626.75 617.75 602.75

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Confidence Medium 29-May 10:00 AM May 71 69.2 64.9 Initial Claims Medium 31-May 8:30 AM 26-May 365K 370K - GDP High 31-May 8:30 AM Q1 1.9% 2.2% - Chicagp PMI Medium 31-May 9:45 AM May 55.0 56.2 - Nonfarm Payroll Medium 01-Jun 8:30 AM May 175K 115K - Construction Spending Medium 01-Jun 10:00 AM Apr 0.0% 0.1% - Auto Sales Low 01-Jun 2:00 PM May NA 5.0M -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 105.60 88.50 889.70 Next 106.00 89.65 899.15 Strong 107.35 90.30 902.80 Support Brent WTI GO Near 103.25 86.70 879.90 Next 102.35 84.30 876.70 Strong 99.10 83.20 873.10       Energy futures crashed yesterday sliding through important supports we had been mentioning few days in a row: Brent @ 104.95, WTI @ 89.85 and GO @ 899.75. This resulted in a slide towards the next target lower which had been largely achieved. Brent found the support around Dec 2011 bottom (103.35 on close and 102.35 on low), it closed at it and remains supported so far. The next support is around October 2011 low @ 99.8, though it remains to be seen if we come close. GO looks little weaker as it was trading and closed below its Dec levels ( 888 on close 881 on low) though it remains attached. WTI has moved into 2011 territory Mid May already, so it is the weakest in comparison. EUR is more dead than alive against USD and this is the major cause on our problems. It has not been so weak since October 2010 and has no significant support until 1.2142.

Source: OW Risk Management