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 closed lower after a volatile trading session yesterday. The June WTI contracts were assesed at $92.81/bbl, down -$1.17. The June Brent futures expired yesterday $111.71/bbl, fell -$0.53 while the July Brent contracts closed $109.75/bbl. Crude declined despite of a relatively positive set of the weekly US DOE crude inventories reported yesterday. Some positive US economic numbers, including the home construction the industrial production data, - were supportive as well. However, negative news shadowed the bullish factors out yesterday. Market was pressed by the increasing possibility that Greece will exit from the Eurozone. Besides that the signals from G8 leaders to prepare to the SPR release to offset the impact from the sanction on Iran upcoming in July were bearish as well. This morning crude is trading up.

Fueloil Specifics

The NWE bunker fuel prices were relatively strong yesterday. Both cargo and bunker fuel prices lost a few cents only. Prices in the ARA port hub were supported by the cargo outflow to Asia. Demand was reported low as traders are not keen n fixing in anticipation of the further weakness on a continuing turmoil in Europe. LSFO remains quite tight in Rotterdam. The Singapore fuel oil markets fell between -$5.0 to -$2.5 during the morning Platts window yesterday. There was a strong buying interest seen in the market, which lifted the cargo premium to above $4.5/mt. The delivered bunker premiums remained around $6.5 above cargo prices. Bunker fuel swaps remained quite strong yesterday though prices had been assessed down at the market close. Prices lost approx. $1.20 - 1.75/mt across the market though they were a little stronger at the back of the curve compared to the front, esp. for the European indices. Prices are slightly down this morning.

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) (1.17) 92.81 ↑ 93.56 93.86 94.09 94.12 94.75 94.75 ICE Brent Swap (1st month) (0.53) 109.75 ↑ 109.47 108.92 108.38 108.39 107.20 107.20 ICE Gasoil Swap (1st month) (0.75) 931.50 ↓ 923.33 922.25 922.58 922.53 921.31 906.00 3.5% Barges FOB Rtdm (0.50) 633.00 ↓ 629.75 627.00 624.00 624.00 614.75 596.00 3.5% Cargoes FOB Med (1.25) 636.50 ↓ 626.25 623.25 620.00 620.00 610.50 591.75 1.0% Cargoes FOB NWE 0.75 670.25 ↓ 668.00 665.75 662.50 662.50 650.25 630.75 3% no. 6 USGC WB (1.40) 98.45 ↑ 99.15 98.75 98.37 97.21 96.16 94.36 380 CST Cargoes FOB S'pore (5.00) 665.00 ↓ 660.25 656.25 652.25 652.25 641.75 621.50 0.1 % GO Barges FOB Rtdm (0.75) 936.50 ↓ 923.25 922.25 923.25 923.25 923.25 909.25 Physical Rotterdam 380 CST (1.00) 641.75 ↓ 640.00 637.25 634.25 634.25 625.00 606.25 Physical Singapore 380 CST (5.00) 672.00 ↓ 670.50 666.50 662.50 663.00 652.50 632.25

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Retail Sales High 15-May 8:30 AM Apr 0.2% 0.8% 0.1% CPI High 15-May 8:30 AM Apr 0.2% 0.2% 0.2% Empire Manufacturing Medium 15-May 8:30 AM May 8.4 6.6 17.1 Business Inventories Medium 15-May 10:00 AM Mar 0.3% 0.6% 0.3% Housing Starts Medium 16-May 8:30 AM Apr 680K 654K 717K Building Permits Medium 16-May 8:30 AM Apr 730K 747K 715K Industrial Production Medium 16-May 9:15 AM Apr 0.5% 0.0% 1.1% Initial Claims Medium 17-May 8:30 AM 12-May 365K 367K - Philadelphia Fed Medium 17-May 10:00 AM May 8.8 8.5 - Leading Indicators Medium 17-May 10:00 AM Apr 0.2% 0.3% -

Technical indicators

Daily Charts Resistance Brent WTI GO Near 111.80 94.15 934.60 Next 111.75 95.20 941.90 Strong 113.40 95.70 944.45 Support Brent WTI GO Near 108.90 92.75 919.25 Next 107.80 91.80 917.50 Strong 107.15 90.25 908.25       Brent futures lost a little yesterday as we expected. However, the contract remains within January range yet. January 2012 low @ 108.9 may be an important level in today’s agenda as we need to watch if it is able to provide a sufficient support. WTI slid to the December levels and found a support from 50% Fibo on October to March move up (@92.7 74.85/110.55). The contract closed around this level yesterday and trades above it so far. GO was quite weak and might not have a strong support until 917.75 or something. Not sure how much downward momentum remains as all indicators are in oversold for quite a while already. The charts do not look strong either. EUR remains in a deep hole, though it did not loose much against USD yesterday, which is somehow positive to me. It may try to hold above 1.27 though it does not look particularly strong.

OW Risk Management   OW Risk Management (OW RMS) is the risk management arm of OW Bunker Group, one of the world’s leading suppliers of marine fuels and lubricants. OW RMS is pricing the derivatives traded by the OW Bunker Group with approximate volume of 40 million metric tonnes per year. OW RMS offers to shipping companies, local suppliers and other counterparts a wide range of risk management products and tools.   We are experts in fuel and gasoil trading both as physically delivered products and derivatives. Based on our long experience in risk management and shipping we together with our clients devise a hedging strategy that is right for them. RMS can offer a tailored solution individually to our clients by using a number of hedging tools. In that way we meet the demand of the customers with various risk profiles.

Source: OW Risk Management