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 remains supported by the Iraq crisis compounded by yesterday news that Gazprom cut off gas supply to Ukraine. The July WTI contract slipped -$0.01 to settle at $106.90 while August Brent closed higher at $112.94/bbl, up +$0.48. The Brent premium over the WTI moved to $6.64. For the time being, despite a spike in prices, investors are not discounting Oil disruption from south Iraq where around 3mbbl are produced. US President Obama is still weighting his possibilities: sending troops on the ground is out of the question and seen as warfare from the past. Preference to new technologies and well prepared small fighting teams will avoid the heavy cost estimated for the last war at 6 trillion usd and 7000 lives. On the economic side, the US May Industrial data showed an uptick of 0.5% within market expectations.  Today, we will see a series of US economic data; the May Consumer Price Index (CPI), Housing Starts and Buildings data. This morning, crude prices are trading around -0,50% down.

Fueloil Specifics

The NWE bunker fuel oil prices closed unchanged yesterday. Suppliers reported good demand and balanced supply levels for all products. The Singapore fuel oil prices corrected lower after a strong surge last week, assessed down between $4.0 and $2.5 during the Asian Platts window yesterday. The delivered bunker premiums were around $4.0 above cargo prices. Bunker fuel oil swaps gained app. $1.5/mt at the front of the curve both for Rotterdam and Singapore papers. The back end was stronger with cal15 papers assessed nearly $3/mt up vs previous day close. This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Jul Aug Sep Q414 Q115 Q215 NYMEX WTI Swap (1st month) (0,01) 106,90 ↓ 105,36 104,39 103,22 100,97 98,27 95,96 ICE Brent Swap (1st month) 0,48 112,94 ↓ 112,11 111,51 110,42 109,32 107,72 106,68 ICE Gasoil Swap (1st month) 3,75 924,50 ↓ 922,00 924,67 926,50 923,36 - - 3.5% Barges FOB Rtdm 2,75 588,00 ↓ 588,00 586,75 584,50 580,75 579,50 575,25 3.5% Cargoes FOB Med 4,63 582,63 ↓ 583,75 583,50 582,50 577,75 576,00 583,50 1.0% Cargoes FOB NWE (5,75) 630,75 ↓ 625,00 623,25 619,25 608,75 599,50 595,75 3% no. 6 USGC WB 0,37 94,15 ↓ 92,45 91,90 91,45 90,86 90,44 89,69 380 CST Cargoes FOB S'pore (2,75) 613,00 ↓ 610,50 607,25 604,75 603,50 601,75 597,75 0.1 % GO Barges FOB Rtdm 4,75 922,25 ↓ 923,25 925,25 927,25 924,25 - - Physical Rotterdam 380 CST 0,00 588,25 ↓ 593,25 592,00 589,75 586,00 584,75 580,50 Physical Singapore 380 CST (2,50) 617,25 ↓ 615,75 612,50 610,00 608,75 607,00 603,00

Focus of the day: ARA

Low demand remains the trend. However, with some newly lit fires in Iraq at least the crude is providing some action creating waves of purchase activities. Although it feels expensive, the fuel oil has softened a touch. So far, no signals that this will change in the short run. The market remains well supplied. The low sulphur premium came off another 7usd over the last week and seems to be heading further South. Quite a few suppliers can provide attractive prices on a relatively short notice. The gasoil is well supplied, discounts are slightly better than last week. Low density gasoil is well supplied. Notification periods for the different grades; four days for high sulphur enquiries and four working days for low sulphur enquiries; two days for gasoil enquiries.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire Manufacturing Medium 16-Jun 8:30 AM Jun 14.0 19.0 19.3 Industrial Production Medium 16-Jun 9:15 AM May 0.7% -0.6% 0.6% Housing Starts Medium 17-Jun 8:30 AM May 1035K 1072K - Building Permits Medium 17-Jun 8:30 AM May 1060K 1080K - Core CPI High 17-Jun 8:30 AM May 0.1% 0.2% - FOMC Rate Decision High 18-Jun 2:00 PM Jun - 0.25% - Initial Claims Medium 19-Jun 8:30 AM 14-jun 310K 317K - Philadelphia Fed Medium 19-Jun 10:00 AM Jun 13.0 15.4 - Leading Indicators Medium 19-Jun 10:00 AM May 0.5% 0.4% -

Source: OW Risk Management