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 price was expected to be volatile going into the US Unemployment but finished on a mixed note ahead of Columbus Day holiday today in the US. The US September Nonfarm Payroll was within expectation of 114k jobs created while the US September Unemployment rate reported a surprising drop to 7.8% from August's figure of 8.1%. The overall employment figure is more about government sector jobs rather than private. This is the first time in four years that the unemployment rate goes below 8%. The November WTI future closed at $89.88/bbl, down $1.83 and Brent down only $0.56 to $112.02/bbl. In terms of economic data, it will be a relatively quiet week starting with Wholesale Inventories and Treasury Budget on Wednesday. Weekly Initial Claims and Trade balance data will be published on Thursday. This week will be closed with Core PPI and Michigan Sentiment on Friday. This morning, crude is trading down.

Fueloil Specifics

The Northwest European fuel oil markets closed last week with slight gains. Both delivered 380cst product and cargo prices were assessed app.$3/mt up versus previous close. ARA ports reported reduced trading while Hamburg remained busy. The Singapore fuel oil markets erased previous loss gaining more than $11.5 flat during the morning Platts window last Friday. The market seems to be well supplied while demand lags behind. The delivered bunker premiums slipped to around $5.0 above cargo prices last Friday. Bunker fuel oil swaps gained a few dollars at the front of the forward curve both for Singapore and Rotterdam papers. Backend was significantly stronger, up by nearly $7/mt for both papers. This morning both markets are trading down.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Nov Dec Jan Q113 Q213 2013 NYMEX WTI Swap (1st month) (1.83) 89.88 ↓ 89.31 89.74 90.07 90.42 91.54 89.32 ICE Brent Swap (1st month) (0.56) 112.02 ↓ 110.11 109.41 108.78 108.19 106.54 110.14 ICE Gasoil Swap (1st month) 10.50 989.50 ↓ 967.08 956.50 948.00 940.61 924.56 923.72 3.5% Barges FOB Rtdm 2.75 616.25 ↓ 608.25 606.50 605.50 604.50 599.00 596.75 3.5% Cargoes FOB Med 2.50 612.50 ↓ 603.25 600.50 599.25 599.50 595.00 592.75 1.0% Cargoes FOB NWE 6.50 656.50 ↓ 646.25 643.25 641.75 640.25 633.75 631.25 3% no. 6 USGC WB (1.43) 96.95 ↓ 96.50 96.18 95.70 95.69 94.70 94.19 380 CST Cargoes FOB S'pore 12.50 647.25 ↓ 631.25 629.75 628.50 627.25 621.75 619.50 0.1 % GO Barges FOB Rtdm 10.00 988.00 ↓ 967.25 957.25 949.25 942.25 926.25 925.25 Physical Rotterdam 380 CST 3.00 625.25 ↓ 618.50 616.75 615.75 614.75 609.25 607.00 Physical Singapore 380 CST 11.00 652.75 ↓ 641.50 640.00 638.75 638.00 632.50 630.25

Focus of the day: Gibraltar

The Gibraltar Strait is seeing a good start of the week with fine weather conditions and operations running smoothly in the three ports. Weather forecast for the rest of the week is good so no major congestion problems are expected for the next few days. There are some suppliers lacking LSFO avails and new cargo arrivals not expected before the end of the week. CIF Med 3.5% is trading some $10 above FOB barges Rotterdam this morning and the HILO spread remains relatively low at around $38. Bunker premiums in the hub remain pretty similar than last week. The Med market is trading down this morning.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Medium 10-Oct 10:00 AM Aug 0.5% 0.7% - Treasury Budget Medium 10-Oct 2:00 PM Sep NA -$62.8B - Initial Claims Medium 11-Oct 8:30 AM 06-Oct 375K 367K - Trade Balanace Medium 11-Oct 8:30 AM Aug -$44.6B -$42.0B - Core PPI High 12-Oct 8:30 AM Sep 0.1% 0.2% - Mich Sentiment High 12-Oct 9:55 AM Oct 80.0 78.3 -

Source: OW Risk Management