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

Some choppy trading on Crude Oil yesterday as the market is waiting from new developments on Syria. Market remains supported by war fears and possibilities of attacks by US and its allies. Although the impact on Oil supply stays unknown, market is pricing in a big geopolitical risk premium. The October WTI futures settled at $110.10/bbl, up by +$1.09 and Brent closed at $116.61/bbl, up by +$2.25. The API Oil inventory report leaned towards the bearish side as crude and products saw a larger than expected build. However, the data had no impact on prices as the market stayed focused on Syria. The only price support came as Cushing stockpile saw a -0.83 mbbl draw. This morning, crude prices are trading -1.0% lower.

Fueloil Specifics

Bunker fuel oil prices continued to rise in the main NWE ports following stronger crude. Delivered 380cst product in Rotterdam and Antwerp was assessed nearly $6/mt up from previous days close. Suppliers reported higher demand as everybody was cautious of rising prices and wanted to fix their stems before further increase. The Singapore fuel oil markets were up more than +$10.5 during the Asian Platts window yesterday on massive surge in crude values. The delivered bunker premiums turned negative, ranging at -$1.25 to +$0.5 above cargo prices as demand was impacted by the spike in outright bunker prices. Bunker fuel oil swaps gained up to $5.5/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was weaker with Cal14 papers up by only some $2.5-3.0/mt and Cal15 unchanged. Visco spread gained some strength on spot and was trading at $4.5/mt yesterday. September was seen at $5.75 while forward prices remained stable trading in a range of $7.0-7.75/mt for the rest of the year. This morning both markets are trading slightly higher.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Sep Oct Nov Q413 Q114 2014 NYMEX WTI Swap (1st month) 1,09 110,10 ↓ 108,83 107,87 106,36 106,32 101,64 97,69 ICE Brent Swap (1st month) 2,25 116,61 ↓ 114,73 113,31 112,14 111,11 109,15 105,46 ICE Gasoil Swap (1st month) 8,45 970,00 ↑ 973,33 971,67 966,58 965,81 948,36 923,59 3.5% Barges FOB Rtdm 5,25 606,50 ↑ 606,00 606,00 605,25 605,75 606,50 595,75 3.5% Cargoes FOB Med 5,50 603,25 ↑ 602,25 602,50 601,50 600,50 600,50 590,75 1.0% Cargoes FOB NWE 5,50 621,75 ↑ 625,75 629,75 631,50 631,25 633,50 621,50 3% no. 6 USGC WB 1,20 97,12 ↑ 96,75 96,25 95,75 95,75 95,70 93,75 380 CST Cargoes FOB S'pore 10,50 614,00 ↑ 620,25 622,25 622,50 622,25 622,50 614,25 0.1 % GO Barges FOB Rtdm 9,00 968,00 ↑ 974,25 972,25 966,25 966,25 947,25 922,25 Physical Rotterdam 380 CST 6,00 608,25 ↑ 611,25 611,25 610,50 610,50 610,75 600,00 Physical Singapore 380 CST 9,50 614,75 ↑ 625,50 627,50 628,75 628,25 627,75 619,50

Focus of the day: Houston

US fuel oil prices strengthened. The latest data from the US Energy Information Administration indicated production and imports both fell along the Atlantic Coast. Market sources feedback about the supply situation are all over the place. Demand in that region looked uncertain as well. Activity during the MOC process pushed up prices modestly, but a wide gap remained between buyers and sellers. Prices in Houston came up $10/mt yesterday as a result of higher crude prices, demand was weak. Platts assessed IFO380 in Houston at $628/mt and $670/mt on the IFO380 1%. In New Orleans, bunker prices moved higher despite the demand that was also kind of tight there. Platts assessed IFO 380 at $629/mt which means a premium of only $1/mt to Houston where it has been arund 5-8/mt in the last weeks. Hi-Lo spread remains around $10/mt higher than in Houston seeing 55-60/mt.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Durable Orders High 26-Aug 8:30 AM Jul -4.5% -3.9% -7.3% Case-Shiller 20-city Index Medium 27-Aug 9:00 AM Jun 12.0% 12.2% 12.1% Consumer Confidence High 27-Aug 10:00 AM Aug 77.0 80.3 81.5 MBA Mortgage Index Medium 28-Aug 7:00 AM 28-aug NA -4.6% -2.5% Pending Home Sales Medium 28-Aug 10:00 AM Jul -1.0% -0.4% -1.3% Initial Claims Medium 29-Aug 8:30 AM 24-aug 335K 336K - GDP- Second Estimate Medium 29-Aug 8:30 AM Q2 2.1% 1.7% - Personal Income Medium 30-Aug 8:30 AM Jul -0.1% 0.3% - PCE Prices- Core Medium 30-Aug 8:30 AM Jul 0.2% 0.2% - Chicago PMI Medium 30-Aug 9:45 AM Aug 53.0 52.3 - Michigan Sentiment- Final Medium 30-Aug 9:55 AM Aug 78.0 80.0 -

Source: OW Risk Management