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 prices rebounded strongly from the morning weakness and kept the gains for the close. The initial market disappointment from the US Federal with no clear sign of economic stimulus gave place to hope of further stimulus in China. The International Energy Agency revised its Oil demand forecast for 2013 up 1M or 1,1% to average 90,9M/d and also the US are exerting additional pressure on Iranian with sanctions on Tankers. The US weekly jobless claims were at a four year low which also lifted the market. The August WTI contract inched up +$0.27 to $86.08/bbl while the August Brent futures rose +$0.84 to $101.07/bbl yesterday. Crude prices remained quite resilient this week. The latest Chinese 2Q GDP reported to be 7.6% lower than expectation of 7.7% and previous first quarter GDP of 8.1%. This weaker economic data was expected as China central bank anticipated it with the last interest rate cut. This morning, crude is trading up.

Fueloil Specifics

380cst bunker fuel prices were assessed unchanged in the NWE yesterday. Cargo prices lost approx. $1.25/mt at the same time. Cargo prices are pressed down by a combination of a good supply and a largely unworkable arbitrage to other markets. Mediterranean market is easing a little though it remains somehow tight on prompt. LSFO avails improved a little with no major logistic issues reported. The Singapore fuel oil markets prices were up by $2.75 - 4.50/mt during the Platts window. The latest Singapore heavy residual inventory saw a massive draw of -3.0 mbbl to 20.73 mbbl. This helped to ease the previously reported build of a similar volume and was attributed to the doubled export volumes to China. The delivered bunker premiums were slipped to $7.25 above cargo prices yesterday. Bunker fuel swaps finished the day with a loss of approx.. $1.75 along the curve both for Rotterdam Barges and Singapore 180 cst Cargo FOB papers. Both markets are trading strongly up this morning following the advance of crude prices overnight.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Aug Sep Oct Q412 Q113 2013 NYMEX WTI Swap (1st month) 0.27 86.08 ↑ 87.12 87.45 87.93 88.28 89.19 88.28 ICE Brent Swap (1st month) 0.84 101.07 ↑ 100.74 100.21 99.87 99.52 99.12 99.52 ICE Gasoil Swap (1st month) (8.00) 866.00 ↑ 879.08 876.00 872.17 870.19 851.50 860.54 3.5% Barges FOB Rtdm (1.50) 564.75 ↑ 574.25 571.25 568.75 566.75 562.75 557.50 3.5% Cargoes FOB Med (1.75) 568.50 ↑ 571.25 568.25 565.25 563.00 558.75 553.25 1.0% Cargoes FOB NWE (1.50) 611.00 ↑ 614.75 610.00 605.25 602.25 596.25 591.00 3% no. 6 USGC WB (0.10) 89.65 ↑ 88.00 87.63 87.30 86.60 86.10 85.89 380 CST Cargoes FOB S'pore 2.75 593.00 ↑ 598.25 595.75 594.50 591.50 586.75 581.00 0.1 % GO Barges FOB Rtdm (7.50) 863.50 ↑ 880.25 878.25 873.25 873.25 866.25 863.25 Physical Rotterdam 380 CST 0.00 575.00 ↑ 584.50 581.50 579.00 577.00 573.00 567.75 Physical Singapore 380 CST 1.50 601.00 ↑ 608.50 606.00 604.75 602.25 597.50 591.75

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Credit Low 09-Jul 3:00 PM May $9.5B $6.5B $17.1B Trade Balance Medium 11-Jul 8:30 AM May -$48.9B -$50.1B -$48.7B Wholesale Inventories Low 11-Jul 10:00 AM May 0.3% 0.6% 0.3% FOMC Minutes Medium 11-Jul 2:00 PM 20-Jun - - - Initial Claims Medium 12-Jul 8:30 AM 07-Jul 375K 374K 350K Export Prices Medium 12-Jul 8:30 AM June NA -0.5% -1.4% Treasury Budget Medium 12-Jul 2:00 PM June -$60.0B -$43.1B -$59.7B PPI High 13-Jul 8:30 AM June -0.6% -1.0% -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 102.35 86.70 889.00 Next 103.05 87.65 889.15 Strong 104.35 88.50 908.95 Support Brent WTI GO Near 100.20 85.40 875.30 Next 99.95 84.10 873.70 Strong 98.50 84.05 854.90       Technical picture was quite different for the three contracts we watch. Brent closed @ 101.07 yesterday having made a new height on close for this month. This was a very positive sign and the contract might be targeting MA55 @ 103.05 now while s/t MA look relatively safe. WTI and GO were less strong yesterday posting intraday losses (though a slight d-o-d gain for the US crude). They yesterday’s strength on energy contracts had been achieved without any help from the currencies as the EUR/USD chart maintain a rather neutral picture at the best. Now it remains to be seen if the lagging contracts will follow Brent or the European grade will correct. Our view remains positive and largely unchanged.

Source: OW Risk Management