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 was trading sideways until the US inventory report was released. Crude and gasoline showed a bigger draw than expected with the exception of distillates stockpile slightly above expectation. This was a trigger for a rally on Crude: The September WTI settled at $94.33/bbl, up +$0.90 while Brent rose +$2.22 to $116.25/bbl. The September Brent contract will expire later today, October closed at $114.31/bbl. The WTI-Brent spread is trading at 21,89 usd this morning a five dollar jump compared to the last days average, reflecting the difficulty to get Oil flowing out from Cushing (Oklahoma) and loss of supply for Brent from the North sea and Iran. Brent is in backwardation in the front of the curve since July and is now reaching $2 on Sep-Oct, some see a period of” super backwardation”. Today in terms of data the market will look at the US weekly jobless claims and Housing starts /Building permits. This morning, crude is trading slightly up.

Fueloil Specifics

The NWE fuel oil prices strengthened yesterday following stronger Brent. Delivered 380cst product in Rotterdam was assessed app. $10/mt higher versus previous day close while cargo prices were up by app.$8/mt. The Singapore fuel oil market prices were up more than +$2.5 during the morning Platts window yesterday. The delivered bunker premiums slipped to around $5.50 to $6.00 above cargo prices. The demand was slow yesterday dampened by the recent few days of stronger outright prices. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Sep Oct Nov Q113 Q213 2013 NYMEX WTI Swap (1st month) 0.90 94.33 ↓ 94.71 95.02 95.45 96.28 96.21 95.43 ICE Brent Swap (1st month) 2.22 116.25 ↑ 114.15 113.42 112.95 111.47 109.79 112.94 ICE Gasoil Swap (1st month) 11.50 969.00 ↑ 978.58 976.00 972.58 963.00 950.19 949.72 3.5% Barges FOB Rtdm 8.25 642.50 ↑ 649.75 647.00 644.50 638.25 631.00 627.75 3.5% Cargoes FOB Med 8.00 642.25 ↑ 644.50 642.00 639.75 633.75 626.75 623.75 1.0% Cargoes FOB NWE 6.25 701.25 ↑ 697.25 690.25 684.50 672.25 664.25 661.00 3% no. 6 USGC WB 1.72 101.23 ↓ 101.50 101.00 100.50 98.00 97.00 97.50 380 CST Cargoes FOB S'pore 0.25 660.25 ↑ 669.75 667.75 666.25 660.75 653.50 650.25 0.1 % GO Barges FOB Rtdm 10.75 965.00 ↑ 979.25 976.25 973.25 962.25 949.25 949.25 Physical Rotterdam 380 CST 10.00 653.75 ↑ 660.00 657.25 654.75 648.50 641.25 638.00 Physical Singapore 380 CST (1.00) 666.75 ↑ 680.00 678.00 676.50 671.50 664.25 661.00

Focus of the day: Houston

Activity increased earlier this week, although still not at the levels seen historically in the US North Atlantic Coast bunker fuel market. Demand in the Southeast, however, has been quite low and availability of 1%S IFO 380 in the area is still scarce. The spread between 1% and 3% for New York Harbor cargo indexes is continuing to grow, with premiums floating for the last week for 1%S IFO 380 CST between $70/mt and $80/mt. Cargo resupply of very high sulfur resid from Canadian refineries continues to flow to New York market, which needs to be blended down to hit RMG 380 specifications. That is why suppliers are keeping a close eye on both 1% and 3% NYH cargo indexes when offering New York and Philadelphia. Continued oversupply of New York Harbor 3% has pushed suppliers to sell HSFO well below regular Benchmarks, with steep discounts to the paper strip. Despite ICE Brent crude futures rising more than $2/bbl, there is still an opportunity to lock in attractive premiums for delivery in the New York and New Jersey area.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 14-Aug 8:30 AM Jul 0.2% -0.5% 0.8% PPI- Core Medium 14-Aug 8:30 AM Jul 0.2% 0.1% 0.4% Business Inventories Medium 14-Aug 10:00 AM June 0.2% 0.3% 0.1% CPI- Core High 15-Aug 8:30 AM Jul 0.2% 0.2% 0.1% Empire Manufacturing Medium 15-Aug 8:30 AM Aug 5.0 7.4 -5.9 Industrial Production Medium 15-Aug 9:15 AM Jul 1.0% 0.4% 0.6% Capacity Utilization Medium 15-Aug 9:15 AM Jul 79.4% 78.9% 79.3% Initial Claims Medium 16-Aug 8:30 AM 11-Aug 365K 361K - Housing Starts Medium 16-Aug 8:30 AM Jul 770K 760K - Philadelphia Fed Medium 16-Aug 10:00 AM Aug -5.0 -12.9 - Mich Sentiment High 17-Aug 9:55 AM Aug 71.0 72.3 - Leading Indicators Medium 17-Aug 10:00 AM Jul 0.2% -0.3% -

Source: OW Risk Management