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 opened the new quarter higher after the previous day losses. The August WTI futures rose $1.43 to settle at $97.99/bbl and Brent closed at $103.00/bbl, up by a smaller margin of +$0.84. The Brent to WTI spread continues to narrow- below $5/bbl this morning- which suggests that the inventory situation at Cushing should see some considerable draws. The market was supported mainly by a better than expected US June ISM data at 50.9%. The market was initially under pressure due to the possibility of the US Federal Reserve to reduce its  bond buying program. However, this risk has receded as most expect the US Federal Reserve to be flexible in their schedule particularly with a US Unemployment Rate still above 7,5%. Today, we will see the US May Factory orders data and later in the evening the US Weekly API Oil stocks. This morning, crude prices are trading slightly up.

Fueloil Specifics

The NWE bunker fuel oil prices rose yesterday following stronger crude. Delivered 380cst product in Rotterdam and Antwerp was assessed up to $6/mt higher versus previous close. There was reported good demand in the area while avails remained tight. The Singapore fuel oil markets erased last session gains, falling between -$4.5 to -$2.0 during the morning Platts window yesterday. Bunker demand was said to be slow while supply appears to be ample and smooth. The delivered bunker premiums were ranging between +$4.5 to +$7.0 above cargoes prices yesterday. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jul Aug Sep Q413 Q114 2014 NYMEX WTI Swap (1st month) 1,43 97,99 ↑ 98,15 97,71 96,72 95,06 93,21 90,79 ICE Brent Swap (1st month) 0,84 103,00 ↑ 102,98 102,45 101,95 101,15 100,05 98,39 ICE Gasoil Swap (1st month) 0,00 883,25 ↓ 878,33 876,00 874,67 870,92 866,19 855,46 3.5% Barges FOB Rtdm 5,00 580,75 ↑ 581,00 573,50 570,00 565,75 563,75 557,75 3.5% Cargoes FOB Med 4,00 574,75 ↑ 575,00 568,00 564,50 559,50 557,50 554,50 1.0% Cargoes FOB NWE (11,00) 586,75 ↑ 595,00 596,50 596,00 592,25 590,75 583,00 3% no. 6 USGC WB 0,65 89,38 ↑ 90,00 89,75 89,25 88,75 88,25 87,25 380 CST Cargoes FOB S'pore (4,50) 582,50 ↑ 588,75 591,50 590,75 589,75 586,75 582,75 0.1 % GO Barges FOB Rtdm (1,50) 881,50 ↓ 879,25 876,25 875,25 873,25 866,25 856,25 Physical Rotterdam 380 CST 5,00 583,25 ↑ 586,25 578,75 575,25 571,00 569,00 563,00 Physical Singapore 380 CST (3,00) 589,50 ↑ 596,00 598,75 598,00 597,00 594,00 590,00

Focus of the day: ARA

Tight avails remain talk of the town. The only bright side for the buyers is the low demand in general, triggering suppliers to give that extra dollar in order to fix. It is however still advised to buy well in advance. The month started with giving a punch on the low sulphur premium nose. It remains to be seen if the premium can be held under pressure. The gasoil market seems to be back in less troubled waters for those who are short. Discounts are around levels as seen early spring. Notification periods for the different grades; six days for high sulphur enquiries and four working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual ISM Index High 1-Jul 10:00 AM Jun 50.5 49.0 50.9 Construction Spending Medium 1-Jul 10:00 AM May 0.5% 0.4% 0.5% Factory Orders Medium 2-Jul 10:00 AM May 2.0% 1.0% - Challenger Job Cuts Medium 3-Jul 7:30 AM Jun NA -41.2% - ADP Employment Change Medium 3-Jul 8:15 AM Jun 150K 135K - Initial Claims Medium 3-Jul 8:30 AM 29-jun 345K 346K - Trade Balance Medium 3-Jul 8:30 AM May -$42.0B -$40.3B - ISM Services Medium 3-Jul 10:00 AM Jun 53.5 53.7 - Nonfarm Payrolls High 5-Jul 8:30 AM Jun 175K 175K - Unemployment Rate High 5-Jul 8:30 AM Jun 7.6% 7.6% -

Source: OW Risk Management