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 were volatile yesterday. The market dipped on the US opening and rebounded sharply into the close. The February WTI futures closed at $94.14/bbl, up $0.58 and  Brent  surged $1.24 to erase the previous day losses to settle at $111.88/bbl. There are a lot of comments on the US WTI crude market after the Seaway pipeline increased the flows from 150k bd to 400k bd and should alleviate the supply overhang at Cushing, Oklahoma. Goldmann Sachs made a call for the WTI-Brent spread to trade at 6usd in Q2 2013 (now at 17,85 usd). The Saudi Arabia spokesman said that the recent supply cut is not to push prices higher but to adjust in accordance to the reduction seen in seasonal demand. The stronger US gasoline and diesel market also supported crude prices following refinery outages over the weekend. Also a cold weather in Europe and lower seasonal temperatures forecasted for next week in the USA added support. The December US Retail Sales and the Empire Manufacturing will be published later today. This morning crude is slightly higher.

Fueloil Specifics

The NWE fuel oil markets started the week on a positive note. Cargo prices were assessed app.$4/mt higher versus Friday's close while delivered 380cst product in Rotterdam remained at unchanged levels. Antwerp and Rotterdam ports reported subdued trading activity during the day still struggling with tight product avails for prompt deliveries. The Singapore fuel oil market prices fell more than $3.0 during the morning Platts window. The fuel oil markets were weaker yesterday following lower demand. The delivered bunker premium were around +$5.0 above cargo prices yesterday. Bunker fuel oil swaps were up app.$2.5/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was a few dollars stronger, flattening the curve slightly. This morning both markets are trading higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Feb Mar Apr Q213 Q313 2013 NYMEX WTI Swap (1st month) 0,58 94,14 ↑ 94,97 95,27 95,48 95,70 95,46 94,65 ICE Brent Swap (1st month) 1,24 111,88 ↑ 111,03 110,29 109,67 109,09 107,33 108,34 ICE Gasoil Swap (1st month) 9,50 954,50 ↑ 960,33 952,58 944,33 941,50 933,46 937,58 3.5% Barges FOB Rtdm 4,00 603,75 ↑ 607,75 606,75 605,75 604,75 601,50 602,75 3.5% Cargoes FOB Med 1,75 604,25 ↑ 603,75 603,25 602,25 600,25 597,00 598,50 1.0% Cargoes FOB NWE 5,75 637,50 ↑ 646,25 644,75 643,25 642,00 637,50 638,50 3% no. 6 USGC WB 0,51 95,18 ↑ 96,00 96,00 95,50 95,25 94,50 94,75 380 CST Cargoes FOB S'pore (6,25) 628,25 ↑ 633,75 632,00 630,75 629,50 626,25 619,25 0.1 % GO Barges FOB Rtdm 15,75 955,00 ↑ 960,25 953,25 944,25 940,25 926,25 933,25 Physical Rotterdam 380 CST 0,00 610,00 ↑ 615,00 614,00 613,00 612,00 608,75 610,00 Physical Singapore 380 CST (5,00) 633,25 ↑ 641,00 639,25 638,00 636,75 633,50 626,50

Focus of the day: ARA

After December rush, there is still some pressure on the high sulphur fuel. This is due to a big trading house buying the front, adding strength to the already existing backwardation and causing the cracks to remain firm. On the low sulphur fuel, the hilos have gained, so the premiums that have to be paid for low sulphur have risen. This is expected to stay strong, since there is still no abundance of blending material. As for the gasoil market, things have gone back to "normal" again; discounts have increased a little bit, due to very soft beginning of the winter. For high sulphur fuel oil, a notification of four working days and for low sulphur fuel oil a notification of three working days should be sufficient to get a choice of suppliers and competitive prices.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-jan 8:30 AM Dec 0.4% 0.3% - Core PPI High 15-jan 8:30 AM Dec 0.1% 0.1% - Empire Manufacturing Medium 15-jan 8:30 AM Jan 0.0 -8.1 - MBA Mortgage Index Medium 16-jan 7:00 AM 12-jan NA 11.7% - Core CPI High 16-jan 8:30 AM Dec 0.1% 0.1% - Industrial Production Medium 16-jan 9:15 AM Dec 0.1% 1.1% - Initial Claims Medium 17-jan 8:30 AM 12-jan 375K 371K - Housing Starts Medium 17-jan 8:30 AM Dec 880K 861K - Building Permits Medium 17-jan 8:30 AM Dec 880K 899K - Philadelphia Fed Medium 17-jan 10:00 AM Jan 1.0 4.6 - Mich Sentiment High 18-jan 9:55 AM Jan 76.0 72.9 -

Source: OW Risk Management