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

Despite a small rebound in the morning European session, oil prices resumed their sharp downtrend last Friday. The DOE Weekly Inventories showed a strong draw in the crude inventory of -7.01 mbbl albeit builds seen in product stockpiles as US refinery utilization rate remains firm and growing. The Northeast of the US is currently affected by heavy snow storms which would curtail demand for transportation fuels. Asia first Equity session of trading closed with losses of around-2%. China’s service sector fell to its lowest level since August 2011 last month at 50,9. Also the slowdown in India’s service sector has now reached six months, the longest decline period since 2008/2009 and came out at 46,7  in December. The February WTI futures lost -$1.48 to $93.96/bbl while Brent also fell -$0.89 to settle at $106.89/bbl. Today, in terms of economic data we will see the US December ISM Non Manufacturing and November Factory Orders. This morning, crude prices are trading +0,50%  to + 0,70% higher respectively for WTI and Brent.

Fueloil Specifics

The Northwest European bunker fuel oil prices closed last week slightly lower. Delivered 380cst product in Rotterdam and Antwerp was assessed only some $3-4/mt down compared to previous close. Suppliers reported picking up trading activity and generally good avails. The Singapore fuel oil markets lost another $7.75 during the Asian Platts window last Friday. The lower outright prices attracted buyers while sellers were reluctant to go lower, resulting in strengthening delivered bunker premiums that were seen at $7.5-6.0/mt. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q114 Q214 Q314 NYMEX WTI Swap (1st month) (1,48) 93,96 ↑ 94,53 94,31 93,90 94,44 93,30 91,25 ICE Brent Swap (1st month) (0,89) 106,89 ↑ 107,18 106,87 106,86 110,67 106,16 104,85 ICE Gasoil Swap (1st month) (13,25) 910,25 ↑ 911,25 909,00 906,08 911,11 903,64 899,03 3.5% Barges FOB Rtdm (8,00) 565,75 ↑ 571,75 572,00 572,00 571,25 571,75 570,50 3.5% Cargoes FOB Med (5,00) 569,75 ↑ 570,75 570,50 570,00 570,50 569,50 568,75 1.0% Cargoes FOB NWE (5,75) 581,25 ↑ 587,75 590,00 591,50 587,25 592,25 592,00 3% no. 6 USGC WB (1,39) 88,10 ↑ 89,50 89,50 89,75 89,50 89,50 89,25 380 CST Cargoes FOB S'pore (7,75) 603,75 ↑ 596,50 593,75 592,25 596,75 592,25 590,75 0.1 % GO Barges FOB Rtdm (13,75) 909,00 ↑ 912,25 910,25 907,25 912,25 905,25 900,25 Physical Rotterdam 380 CST (4,00) 575,75 ↑ 577,00 577,25 577,25 576,50 577,00 575,75 Physical Singapore 380 CST (7,00) 610,75 ↑ 601,75 599,00 597,50 602,00 597,50 596,00

Focus of the day: Gibraltar

The Gibraltar Strait started the New Year with very competitive levels, just continuing last year’s trend of reacting to the growing competition in the hub. Outright bunker prices in the Gibraltar Strait are firm this morning, with relatively high premiums attributed to Spain being closed today on its last celebration within the Xmas season. Low buying interest defines the market this morning, below average activity. Operations wise smooth deliveries and no congestion at any of the three ports in the hub, which enjoys good product avails even for prompt deliveries. CIF Med 3.5% is trading some 22 usd/mt above FOB Barges Rotterdam and the HILO is currently at app.13 usd/mt in the Med. The Med market is trading up this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Factory Orders Medium 6-Jan 10:00 AM Nov 2.0% -0.9% - ISM Services High 6-Jan 10:00 AM Dec 53.0 53.9 - Trade Balance Medium 7-Jan 8:30 AM Nov -$41.5B -$40.6B - ADP Employment Change Medium 8-Jan 8:15 AM Dec 185K 215K - FOMC Minutes High 8-Jan 2:00 PM 18-dec - - - Consumer Credit Medium 8-Jan 3:00 PM Nov $15.0B $18.2B - Nonfarm Payrolls High 10-Jan 8:30 AM Dec 185K 203K - Unemployment Rate High 10-Jan 8:30 AM Dec 7.1% 7.0% - Wholesale Inventories Medium 10-Jan 10:00 AM Nov -0.2% 1.4% -

Source: OW Risk Management