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 are still under pressure after Friday’s sell-off. The November WTI contract closed down -$1.32 and expired at $88.73/bbl, a three week low, while December WTI closed at $88.65/bbl. The December Brent futures fell -$0.70 to $109.44/bbl. The last US corporate earning results have been -for many companies- under expectations and/or with lower guidance for the next quarters adding to the market gloom. The Euro held on after the local election in Galicia was won by the current prime minister party. With -0,4% for Q3 it is the fifth quarter in a row that the Spanish economy contracts and spreads more rumors in the market that the country will ask for a full bailout in the coming weeks. This morning, crude futures are trading down.

Fueloil Specifics

The NWE bunker fuel oil prices continued to soften at the beginning of the week. Delivered 380cst product in Rotterdam was assessed down by app.$7/mt while cargoes lost more than $5.5/mt. Demand in the area remained dampened. The Singapore fuel oil markets fell more than $6.5 during the morning window yesterday. The buying interest for Fuel Oil swaps was tremendous and has narrowed the Asian Fuel Oil cracks significantly during the past days. The delivered bunker premiums strengthened to around $6.0 above cargo prices yesterday tracking the stronger crude movements. Bunker fuel oil swaps lost app.$6/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was a few dollars weaker. This morning both markets are trading slightly higher.

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) (1.32) 88.65 ↓ 88.59 89.10 89.60 90.02 91.01 90.69 ICE Brent Swap (1st month) (0.70) 109.44 ↓ 108.93 108.21 107.57 107.04 105.66 105.02 ICE Gasoil Swap (1st month) (19.25) 977.25 ↓ 958.17 948.33 942.75 935.22 920.25 918.75 3.5% Barges FOB Rtdm (5.50) 606.25 ↑ 607.75 607.75 608.75 608.00 604.00 600.50 3.5% Cargoes FOB Med (6.00) 606.00 ↑ 602.50 602.50 602.25 604.00 600.75 597.50 1.0% Cargoes FOB NWE (6.75) 630.50 ↑ 636.25 638.75 641.00 640.50 636.75 633.25 3% no. 6 USGC WB (0.08) 95.13 ↓ 95.02 94.65 94.80 94.15 93.40 93.70 380 CST Cargoes FOB S'pore (7.00) 636.25 ↑ 633.00 632.25 631.75 631.00 627.25 623.75 0.1 % GO Barges FOB Rtdm (22.25) 986.25 ↓ 958.25 948.25 943.25 939.25 927.25 924.25 Physical Rotterdam 380 CST (7.00) 616.00 ↑ 618.00 618.00 619.00 618.25 614.25 610.75 Physical Singapore 380 CST (5.00) 642.00 ↑ 643.25 642.50 642.00 641.75 638.00 634.50

Focus of the day: ARA

ARA market last week showed good avails for all grades in basically all ports – little exception was Amsterdam: a relatively high amount of enquiries, mainly prompt with short notice lead to a very congested situation with tight avails. The demand in general has been at a normal level while many players where waiting for the market to finally drop to lower levels. Now with Brent being around and below $110/bbl we expect a higher demand the following days.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual MBA Mortgage Index Medium 24-Oct 7:00 AM 20-Oct NA -4.2% - New Home Sales Medium 24-Oct 10:00 AM Sep 385K 373K - FOMC Rate Decision High 24-Oct 2:15 PM Oct 0.25% 0.25% - Initial Claims Medium 25-Oct 8:30 AM 20-Oct 375K 388K - Continuing Claims Medium 25-Oct 8:30 AM 13-Oct 3275K 3252K - Durable Orders High 25-Oct 8:30 AM Sep 12.0% -13.2% - Pending Home Sales Medium 25-Oct 10:00 AM Sep 1.0% -2.6% - GDP-Adv. High 26-Oct 8:30 AM Q3 0.9% 1.3% - Chain Deflator- Adv. Medium 26-Oct 8:30 AM Q3 2.6% 1.6% - Michigan Sentiment- Final High 26-Oct 9:55 AM Oct 82.5 83.1 -

Source: OW Risk Management