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 stayed under the water line yesterday: April Brent closed at $108.02/bbl down -$0.53 and WTI plunged -$2.04 to $100.03/bbl on a massive +6.18 mbbl build on crude inventory. Cushing stockpile continue to draw at -1.34 mbbl, although less than last week -2.66 mbbl. This could be attributed to the larger than expected cut in US refinery utilization runs at -1.4%. The gasoline inventory came out with larger than expected draw at  -5.23 mbbl vs -1.60 mbbl. The market is much under pressure by the recent weaker Chinese economic data. China industrial-output and retail sales growth cooled more than expected in January and February. It is the weakest start of the year since 2009 for the Factory production and since 2004 for Retail sales. Crude processing fell to a four-month low on a weak demand. The Chinese government have opened the door to possible monetary easing should the economy continue to show some sign of slowdown. This morning, crude is trading slightly down.

Fueloil Specifics

The NWE bunker fuel oil markets reported again a relatively quiet day yesterday with delivered 380cst product in Rotterdam and Antwerp quasi flat from previous days close. Suppliers continuously saw tight LSFO avails though the expectations are that the situation should improve towards the weekend. The Singapore fuel oil prices extended price weakness by app.$1/mt during the Asian Platts window. The fuel oil cracks continued to strengthen as fuel oil was supported despite weaker crude prices. The delivered bunker premiums remained around $4.5/mt. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values   Forward Indications Product Change Last Dir. Apr May Jun Q314 Q414 Q115 NYMEX WTI Swap (1st month) (2,04) 97,99 ↓ 97,52 96,91 96,20 96,88 94,70 92,58 ICE Brent Swap (1st month) (0,53) 108,02 ↓ 107,10 106,75 106,75 106,31 105,33 103,29 ICE Gasoil Swap (1st month) - 895,50 ↓ 894,17 893,92 893,75 892,78 887,03 - 3.5% Barges FOB Rtdm (1,00) 573,25 ↑ 574,75 574,25 573,75 572,25 567,75 566,00 3.5% Cargoes FOB Med (1,00) 570,25 ↑ 572,75 572,50 572,00 570,00 565,50 564,50 1.0% Cargoes FOB NWE (12,50) 624,00 ↑ 607,75 603,75 602,50 600,50 592,50 583,00 3% no. 6 USGC WB (0,05) 89,94 ↓ 89,55 89,40 89,53 89,03 88,34 88,04 380 CST Cargoes FOB S'pore (0,75) 595,75 ↑ 595,25 595,25 595,25 593,75 591,75 590,25 0.1 % GO Barges FOB Rtdm (13,25) 893,50 ↓ 895,25 895,25 895,25 894,25 888,25 - Physical Rotterdam 380 CST 0,00 574,75 ↑ 580,00 579,50 579,00 577,50 573,00 571,25 Physical Singapore 380 CST 0,00 603,25 ↑ 600,50 600,50 600,50 599,00 597,00 595,50

Focus of the day: Houston

While the Gulf Coast market has been calm with only few inquiries, crude has taken bunker prices on a roller-coaster ride. The market price on the other hand has been affected by Ukraine crisis. The sense of security is always an important fact in the trading business and a threat of the worsening relationships between Russia and the world affects its balance. On a good note, product avails in New Orleans are improving. For comparison, last week 380 HSFO was been offered at $645 while levels offered this Wednesday were below $630. Of course, it is still a $40 premium when compared to Houston’s $585 MTW levels, but it is also a $15/$30 discount to last week’s price. Perhaps a sign that the premium between New Orleans and Houston will narrow in the coming days.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Wholesale Inventories Medium 11-Mar 10:00 AM Jan 0.3% 0.3% 0.6% Treasury Budget Medium 12-Mar 2:00 PM Feb NA -$203.5B - Initial Claims Medium 13-Mar 8:30 AM 08-mar 335K 323K - Retail Sales High 13-Mar 8:30 AM Feb 0.2% -0.4% - Business Inventories Medium 13-Mar 10:00 AM Jan 0.3% 0.5% - Core PPI Medium 14-Mar 8:30 AM Feb 0.1% 0.2% - Mich Sentiment High 14-Mar 9:55 AM Mar 81.6 81.6 -

Source: OW Risk Management