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 Oil prices closed the year on a positive note. The February WTI contracts closed more than $1.0 higher, at $90.87/bbl while Brent edged up +$0.49 to settle at $111.11/bbl. The US senate approved a bill that prevented tax hikes coupled with deep cuts to public spending which would have potentially derailed the weak US economy and pushed it towards recession. Republicans turned to their next battle as they vowed to fight President Obama in coming weeks for spending cuts in exchange for rising the debt ceiling. Congress must act as early as mid-February to prevent a default. In Asia, the December Chinese Manufacturing PMI held firm at 50.6. This morning, crude is trading up. Please note that weekly US Energy Department inventory report will be released first on Friday.

Fueloil Specifics

The Northwest European bunker fuel oil markets remained stable on the last day of the year following low volumes traded. Both delivered 380cst product in Rotterdam and cargo prices closed app.$1 down compared to previous day close. Rotterdam port continuously reports tight HSFO avails with replenishment expected during 7-11 January. The Singapore markets lost ground, dropping more than -$6.0 to flat during the Platts window last Monday. The latest heavy residual inventory report showed a marginal draw of -0.5 mbbl to 19.5 mbbl. The delivered bunker premiums were seen at $3.5 above cargo prices. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jan Feb Mar Q213 Q313 2013 NYMEX WTI Swap (1st month) 1,02 91,82 ↑ 92,92 93,36 93,78 94,27 93,98 93,49 ICE Brent Swap (1st month) 0,49 111,11 ↑ 111,18 110,12 109,35 108,18 107,90 108,20 ICE Gasoil Swap (1st month) (6,00) 927,00 ↑ 940,83 939,50 934,75 927,31 921,89 925,61 3.5% Barges FOB Rtdm (0,75) 576,25 ↑ 589,00 591,75 593,50 595,50 595,50 593,75 3.5% Cargoes FOB Med (1,75) 568,50 ↑ 580,00 583,75 582,75 589,50 589,50 588,00 1.0% Cargoes FOB NWE (0,50) 657,50 ↑ 613,25 618,25 621,00 624,50 625,75 622,50 3% no. 6 USGC WB 0,28 94,50 ↑ 94,15 93,40 93,15 92,83 92,58 92,80 380 CST Cargoes FOB S'pore (6,00) 606,00 ↑ 612,75 615,25 607,25 619,50 620,25 618,00 0.1 % GO Barges FOB Rtdm (6,00) 925,75 ↑ 941,25 940,25 935,25 928,25 920,25 922,25 Physical Rotterdam 380 CST (1,00) 584,75 ↑ 599,25 602,00 603,75 605,75 605,75 604,00 Physical Singapore 380 CST (6,50) 608,75 ↑ 623,00 625,50 617,50 630,25 631,00 628,75

Focus of the day: Singapore

Onshore stocks of fuel oil in Singapore fell to a ten-week low amid strong regional demand. Fuel oil inventories fell 534,000bbl to 19.465 million barrels during the week, data showed. The decrease was attributed to stronger demand from Japan, South Korea as well as China, as local teapot refiners continue to stock up ahead of a new consumption tax in January. However sentiment was still depressed as traders said that Japanese demand was healthy, but not as robust as at this time last year. Players said a persistent supply glut was continuing and that demand for bunker fuel was sluggish. Western arrivals, meanwhile, remained high at about 600,000mt during the week and expected to remain high through the first quarter of the next year. Bunker prices fell across key Asian ports on the last day of the year. In Singapore, benchmark 380cst bunker fuel dropped $6.50 to average at $605.50/mt on Monday. Marine gas oil (MGO) fell a dollar from last Friday's level to be pegged at $930/mt, data showed. Supplies were fine while earliest deliveries were available from January 3-8.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual MBA Mortgage Index Medium 02-jan 7:00 AM 29-dec NA -12.3% - ISM Index High 02-jan 10:00 AM Dec 51.0 49.5 - Construction Spending Medium 02-jan 10:00 AM Nov 0.5% 1.4% - Auto Sales Medium 02-jan 2:00 PM Dec NA 5.6M - Challenger Job Cuts Medium 03-jan 7:30 AM Dec NA 34.4% - ADP Employment Change Medium 03-jan 8:15 AM Dec 150K 118K - Initial Claims Medium 03-jan 8:30 AM 29-dec 365K 350K - Nonfarm Payrolls Medium 04-jan 8:30 AM Dec 150K 146K - Unemployment Rate High 04-jan 8:30 AM Dec 7.7% 7.7% - Factory Orders Medium 04-jan 10:00 AM Nov 0.5% 0.8% - ISM Services Medium 04-jan 10:00 AM Dec 53.5 54.7 -

Source: OW Risk Management