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 prices had been drifting higher last Friday and close with a small gain. The July WTI contracts remained above the $90 mark closed with a 20 cents gain @ $90.86/bbl, while the July Brent contracts added $0.28 to the price having closed @ $106.83/bbl. The crude was supported by the rebound in European equities coupled with strengthening Euro against other currencies. The Iran nuclear negotiation outcome remains unclear despite some signs of progress in negotiations, which will continue next month. Markets have broadly corrected over the last few weeks as economic uncertainty and weakness both in Europe and Asia was taking its toll on the market. This week the market may take some clues from the consumer confidence numbers due tomorrow. The weekly US employment data, GDP numbers, income data and car sales will be reported later during the week. We should also watch the investor’s reactions on the development of the Greece debt situations. This morning, crude is trading slightly up.

Fueloil Specifics

Bunker fuel prices in the closed the week with a gain NWE marked. Cargo prices were up by approx. $3.25/mt while the delivered bunker grade was slightly stronger. Besides strengthening crude futures, prices in the ARA hub were supported by an on-going arbitrage to Asia. The markets saw rather thin volumes though. The Singapore fuel oil markets rose more than $13.0/mt during the Platts window last Friday. Markets were firmer as fuel oil values were lifted by stronger crude and also strong buying interest. The Singapore heavy residual inventory saw a build of 0.53 mbbl to 18.9 mbbl. The delivered bunker premiums were around $7.5/mt above cargo prices. Front month bunker fuels swaps gained approx. $4.5/mt both for Rotterdam barges and Singapore Cargo FOB papers. Notably, prices were stronger at the back of the curve, esp. in Singapore, indicating some expectations of stronger markets in the future. Both markets are trading slightly higher today.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jun Jul Aug Q312 Q412 2013 NYMEX WTI Swap (1st month) 0.20 90.86 ↑ 91.76 92.08 92.35 92.33 92.66 92.66 ICE Brent Swap (1st month) 0.28 106.83 ↑ 107.28 106.81 106.37 106.38 105.26 105.26 ICE Gasoil Swap (1st month) 2.75 908.25 ↑ 908.58 906.00 905.33 905.14 904.94 894.62 3.5% Barges FOB Rtdm 3.25 618.75 ↑ 616.00 611.25 607.75 607.75 598.25 582.00 3.5% Cargoes FOB Med 7.50 621.75 ↑ 612.00 606.25 603.25 603.25 594.00 577.75 1.0% Cargoes FOB NWE 3.50 652.75 ↑ 652.00 649.50 646.00 645.75 634.25 617.00 3% no. 6 USGC WB 0.55 96.60 ↑ 96.40 95.95 95.50 94.15 93.05 91.65 380 CST Cargoes FOB S'pore 13.25 649.50 ↑ 644.75 640.00 636.00 636.75 626.75 608.75 0.1 % GO Barges FOB Rtdm 2.75 911.25 ↑ 908.25 906.25 905.25 905.25 906.25 898.25 Physical Rotterdam 380 CST 4.00 626.00 ↑ 626.25 621.50 618.00 618.00 608.50 592.25 Physical Singapore 380 CST 13.00 656.75 ↑ 655.00 650.25 646.25 647.50 637.50 619.50

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Consumer Confidence Medium 29-May 10:00 AM May 71 69.2 - Initial Claims Medium 31-May 8:30 AM 26-May 365K 370K - GDP High 31-May 8:30 AM Q1 1.9% 2.2% - Chicagp PMI Medium 31-May 9:45 AM May 55.0 56.2 - Nonfarm Payroll Medium 01-Jun 8:30 AM May 175K 115K - Construction Spending Medium 01-Jun 10:00 AM Apr 0.0% 0.1% - Auto Sales Low 01-Jun 2:00 PM May NA 5.0M -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 107.65 92.70 912.70 Next 109.15 92.80 922.35 Strong 109.60 93.20 925.80 Support Brent WTI GO Near 106.70 91.40 910.50 Next 105.60 90.95 909.25 Strong 104.95 90.70 900.00       All charts look healthier today compared to the last Friday from the technical point of view. The supports we wrote about in the last two reports held nicely. Besides that we have a completed bullish divergence on all charts as well as positive stochastics. As prices had climbed towards s/t MAs we need to concentrate on them and watch the action around. Note EUR/USD looks much better today. The technical picture is similar to the energy charts and has a formed divergence as well. Attention has moved towards MA 5, 8 and 13. However, the strong supports below must be kept in mind, they are as follows: Brent @ 104.95, WTI @ 89.85 and GO @ 899.75.

Source: OW Risk Management