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

On Friday Crude prices remained well supported. The August WTI futures settled at $87.10/bbl, up +$1.02 and Brent contract rose to +$1.33 at $102.40/bbl. Crude prices kept their gains on optimism that China may introduce some additional economic stimulus soon. China 2Q GDP grew by only +7.6%; a three year record low, confirming the slower economic growth as compared to the last quarter at +8.1%. US has exerted stronger pressure on Iran's crude sanction via voiding shipping insurance on Iranian crude oil. Surprisingly, crude prices have remained resilient in the face of bearish news and investors are focusing on economic stimulus policies from the various central banks. We will see the release of the US June Retail Sales figures later today. This coming week, US Federal Reserve Chairman will be giving his testimony in Congress for hints of additional liquidity into the market. This morning, Brent crude is trading up while WTI is slightly down.

Fueloil Specifics

NWE bunker fuel market closed the last week with strong gains. 380cst bunker fuel product prices were assessed up by approx. $13/mt. Cargo prices gained a few cents less. Prices in the ARA port hub followed an advance in crude futures while the local situation remains unchanged with a difficult Asian arbitrage economics and questionable demand in Asia where the market feels a downturn in Chinese buying. The Singapore fuel oil market prices rose by more than $8.0 during the local Platts window last Friday tracking the crude. The delivered bunker premium slipped to approx.. $8.0/mt above cargo prices on firm crude prices were after the window. Bunker fuel swaps finished the week with a gain as well. Prices grew by approx. $12.75/mt both for Rotterdam Barges and Singapore 180 cst Cargo FOB papers. This resulted in the forward curve lifting higher without major changes of its structure. Both markets are trading higher this morning though the markets remain rather thin.

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) 1.02 87.10 ↓ 87.26 87.71 88.26 88.65 89.83 88.65 ICE Brent Swap (1st month) 1.33 102.40 ↑ 101.45 100.99 100.72 100.49 99.70 100.49 ICE Gasoil Swap (1st month) 5.75 879.75 ↑ 880.50 879.50 876.83 875.69 851.50 863.06 3.5% Barges FOB Rtdm 12.50 577.25 ↑ 577.50 574.75 572.25 570.50 566.25 560.50 3.5% Cargoes FOB Med 11.25 579.25 ↑ 574.50 571.50 568.75 566.75 562.25 556.25 1.0% Cargoes FOB NWE 12.75 624.00 ↑ 617.50 612.25 607.75 605.00 598.25 592.75 3% no. 6 USGC WB 1.45 91.10 ↓ 89.00 88.60 88.30 87.55 86.95 86.75 380 CST Cargoes FOB S'pore 8.25 601.75 ↑ 601.75 599.50 598.00 595.25 590.25 584.00 0.1 % GO Barges FOB Rtdm 13.50 877.25 ↑ 882.25 881.25 878.25 879.25 870.25 865.25 Physical Rotterdam 380 CST 13.00 587.75 ↑ 587.75 585.00 582.50 580.75 576.50 570.75 Physical Singapore 380 CST 9.00 609.75 ↑ 612.00 609.75 608.25 606.00 601.00 594.75

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 16-Jul 8:30 AM June 0.2% -0.2% - Business Inventories Medium 16-Jul 10:00 AM May 0.2% 0.2% - CPI High 17-Jul 8:30 AM June 0.1% -0.3% - Industrial Production High 17-Jul 9:15 AM June 0.3% -0.1% - Housing Strats High 18-Jul 8:30 AM June 743K 708K - Initial Claims Medium 19-Jul 8:30 AM 14-Jul 365K 350K - Existing Home Sales Medium 19-Jul 10:00 AM June 4.65M 4.55M - Leading Indicators Low 19-Jul 10:00 AM June -0.2% 0.3% -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 103.40 87.65 889.00 Next 104.20 88.50 893.50 Strong 104.35 88.95 895.75 Support Brent WTI GO Near 102.80 85.95 877.00 Next 100.95 85.40 876.80 Strong 100.50 84.75 876.50       All three contracts we watch posted strong gains at the close of the last week. Brent had been traded above MA34 for a while. The slide below on close, however it managed to make a new height on close for the month. US crude and GO did not manage to test the July heights last Friday, and both contracts will still have the targets at those levels. The contracts do not look overdone yet and a new test of the nearby resistance might follow. However, we note the RSI divergence on the Brent chart, which might be a warning of a weakening upward momentum. An eventual move above MA34 on the Brent chart (@102.8, is tested right now) should be positive as well as a convincing move over the recent tops on the WTI or GO charts. The EUR/USD showed some signs of life though they were not very convincing yet. It remains to be seen if the EUR will mange to find some support against USD around 1.22.

Source: OW Risk Management