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

Brent crude prices rebounded  erasing the previous day trading loss of around -$2.5 to settle at $111.00/bbl. Monday Brent opened with nearly 2 dollar gap down after an agreement was reached between  Iran and the West during the week-end.  However, markets are still sceptical that Iran will stick to the agreement. It is estimated that sanctions have deprived Iran from $80 bln of Oil revenues through the years. The impact on the Oil market being limited for the next 6 months as Iran needs to remedy operational issues first. Short term Iran may release crude from some floating storage “if it has remaining volumes”. The January WTI futures fell by -$0.75 to close $94.09/bbl and Brent contract slipped -$0.05 to close at $111.00/bbl. This also brought the Brent/WTI spread to a new high of +$16.58. Note that US Oil stock figures could show a draw for the first time in 2 months. The US market is having their Thanks giving holiday coming up this Thursday and trading volume is expected to get lighter moving towards the weekend. This morning, crude prices are trading down -0.1% for Brent and up 0,50 %for WTI.

Fueloil Specifics

The NWE bunker fuel oil markets started the week with lower prices following softer Brent values. Delivered 380cst product both in Rotterdam and Antwerp was assessed some $3-4/mt down compared to previous close. However, premiums for prompt deliveries remain on the higher side. The Singapore fuel oil market fell more than -$5.0 during the Asian Platts window yesterday. The delivered bunker premiums were to around $6.5 above cargo prices amidst another session of slow bunker demand. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Dec Jan Feb Q114 Q214 2014 NYMEX WTI Swap (1st month) (0,75) 94,09 ↑ 94,71 94,99 95,06 95,05 94,46 93,41 ICE Brent Swap (1st month) (0,05) 111,00 ↓ 110,68 110,14 109,75 109,40 108,70 107,79 ICE Gasoil Swap (1st month) (3,00) 934,75 ↑ 940,33 938,83 936,75 936,36 926,47 923,47 3.5% Barges FOB Rtdm (4,50) 573,75 ↑ 577,75 581,25 582,25 582,25 583,75 582,50 3.5% Cargoes FOB Med (6,25) 582,75 ↑ 575,00 577,50 578,00 577,50 579,00 578,75 1.0% Cargoes FOB NWE 3,50 606,75 ↑ 610,75 609,75 610,25 609,25 611,00 607,00 3% no. 6 USGC WB (0,44) 90,53 ↑ 90,75 90,50 90,75 90,75 91,00 90,75 380 CST Cargoes FOB S'pore (5,75) 600,75 ↑ 603,25 599,75 600,00 600,00 600,50 601,00 0.1 % GO Barges FOB Rtdm (2,50) 933,50 ↑ 941,25 940,25 938,25 937,25 926,25 923,25 Physical Rotterdam 380 CST (4,00) 580,00 ↑ 583,00 586,50 587,50 587,50 589,00 587,75 Physical Singapore 380 CST (5,00) 608,25 ↑ 608,50 605,00 605,25 605,25 605,75 606,25

Focus of the day: ARA

The crude has jumped quite a bit and this time fuel is not lagging. The crack remains around a weak -19,00, but is more or less following the crude. This provides some action for the trading houses and some difficulty for buyers. The front spread is backwardated but not spectacularly. As loading problems remain the talk of the town, we don’t see any reason for heavy fuel to soften on a short notice, hence we stand by our advice; secure your bunkers in time! The low sulphur premium has taken another step on the ladder, being around 25 dollars now. As batches keep being off spec and queuing has lost nothing of her fashion, we remain bullish on this product as well. Buy well in advance! Not much going on for the gasoil here. It’s abundant and cheap. Notification periods for the different grades; five days for high sulphur enquiries and five working days for low sulphur enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Pending Home Sales Medium 25-Nov 10:00 AM Oct 1.0% -5.6% -0.6% Housing Starts Medium 26-Nov 8:30 AM Oct 915K NA - Building Permits Medium 26-Nov 8:30 AM Oct 930K NA - Case-Shiller 20- city Index Medium 26-Nov 9:00 AM Sep 13.0% 12.8% - Consumer Confidence High 26-Nov 10:00 AM Nov 74.0 71.2 - Initial Claims Medium 27-Nov 8:30 AM 23-nov 335K 323K - Durable Orders High 27-Nov 8:30 AM Oct -3.0% 3.8% - Chicago PMI Medium 27-Nov 9:45 AM Nov 58.0 65.9 - Michigan Sentiment- Final Medium 27-Nov 9:55 AM Nov 73.5 72.0 - Leading Indicators Medium 27-Nov 10:00 AM Oct -0.1% 0.7% -

Source: OW Risk Management