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 started the week trending lower yesterday as news of oil production in Libya resumed and also the Buzzard oilfield in the North Sea restarting dampened prices yesterday. Although the equities yesterday softened on the market perception over possible US Federal Reserve tightening of the stimulus program, crude market remains resilient and covering back initial losses to close marginally lower on close yesterday. Market seems to be more closely guided by the outcome of economic readings and July ISM nonmanufacturing data showed a positive reading of 56.0% compared to an expectation of 53.1%. The September WTI contracts slipped -$0.38 to close $106.56/bbl while the September Brent closed $108.70/bbl, similarly down only -$0.25. This week is light on US economic data week. Today, we will see the US June trade deficit and also job openings data. This morning, crude is trading lower.

Fueloil Specifics

The Rotterdam 3.5% barges fell yesterday and there is still plenty of backwardation in Rotterdam barges, whereas the Singapore 380 is trading contango.  The Singapore fuel oil markets gained between +$1.0 to +$3.0 on the Platts window yesterday and the Visc Spread narrowed to a year-low at only 0.17 spot. The delivered bunker premiums were ranging between $3.5 to $6.5 above cargo prices yesterday as crude prices weakened after the window.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Yesterday's Values Forward Indications               Product Change Last Dir. Aug Sep Oct Q413 Q114 2014 NYMEX WTI Swap (1st month) 0,10 106,56 ↓ 106,34 105,32 103,80 102,42 98,94 102,42 ICE Brent Swap (1st month) (0,59) 108,70 ↓ 108,05 107,20 106,46 105,78 104,06 102,02 ICE Gasoil Swap (1st month) (3,25) 920,25 ↓ 917,58 918,83 917,50 914,42 903,78 886,57 3.5% Barges FOB Rtdm 2,00 613,75 ↓ 597,25 582,50 580,00 579,25 579,50 572,75 3.5% Cargoes FOB Med 3,00 607,75 ↓ 589,25 575,75 565,75 574,00 576,25 571,00 1.0% Cargoes FOB NWE 1,75 657,50 ↓ 603,00 607,50 608,50 608,75 610,75 602,75 3% no. 6 USGC WB (0,77) 92,06 ↓ 91,65 91,25 90,97 90,82 90,87 89,95 380 CST Cargoes FOB S'pore 1,50 599,00 ↓ 601,50 602,00 602,50 602,50 601,50 596,00 0.1 % GO Barges FOB Rtdm (3,75) 922,75 ↓ 918,25 919,25 918,25 915,25 903,25 886,25 Physical Rotterdam 380 CST 5,00 617,00 ↓ 607,50 588,75 586,25 585,50 586,75 581,00 Physical Singapore 380 CST 1,00 604,50 ↓ 606,75 607,25 607,75 608,25 608,25 603,75

Focus of the day: ARA

A very quiet but interesting trade week has passed. Very slow demand and enormous backwardation on the high sulphur and a huge contango on the low sulphur, has made the premium for low sulphur to high sulphur converge to almost ZERO. It shows in the behaviour of the suppliers, since paper at the moment provides no clues for the value of fuel on close of business, the offered numbers vary as much as 10 dollars per supplier. It is a tricky market, also for buyers trying to beat benchmarks. The only plus is that backwardation triggers suppliers to do better prices, in order to not become penalized by the backwardation. The low sulphur barges are assessed only one quarter of a dollar above high sulphur barges. One would expect this is as low as it can go, or will we see a discount on ‘eco-unfriendly’ fuel…? No changes in the gasoil market worth mentioning. Notification periods for the different grades; four days for high sulphur enquiries and three working days for low sulphur enquiries

Economy fundamentals this week

Fundamental Indicators Fundamental Indicators               Statistic Importance Date Time Period Consensus Last Actual ISM Services High 05-aug 10:00 AM Jul 53.2 52.2 53.1 Trade Balance High 06-aug 8:30 AM Jun -$43.4B -$45.0B   MBA Mortgage Index Medium 07-aug 7:00 AM 03-aug N/A -3.7%   Crude Inventories Medium 07-aug 10:30 AM 03-aug N/A 0.431M   Consumer Credit Medium 07-aug 3:00 PM 03-aug 340K 326K   Initial Claims Medium 08-aug 8:30 AM aug-13 340K 326K   Continuing Claims Medium 08-aug 8:30 AM 27-jul 2975K 2951K

Source: OW Risk Management