The Northwest European high sulfur fuel oil crack has hit an 11-month high, as the product has seen an increase in demand from storage in Europe and as a feedstock in the US.

The FOB Rotterdam 3.5%S fuel oil barge crack was assessed June 4 at minus $5.503/b, up from minus $8.12/b on May 27. It was last seen at a similar level on June 28, 2019, at minus $5.472/b.

IMO 2020, which reduced the amount of sulfur in marine fuel globally, had been expected to be the end of HSFO, but the product has proved resilient, finding new outlets.

In May, significant volumes of HSFO were seen heading to the US for use as a feedstock, when the product was valued at a 20-year low.

On April 27, FOB Rotterdam 3.5%S fuel oil barges were assessed at $79.75/mt, the lowest since June 1999. The price was up at $212.25/mt as of June 4.

According to the energy research company Kpler, 7.53 million barrels were seen heading to the US from Europe in May, up from 2.67 million barrels in April.

Meanwhile, sources have also reported an increase in storage demand within Europe alongside use from vessels fitted with scrubbers.

“More and more vessels will have scrubbers on board their vessels as time goes on. They have HSFO stems every week,” one European-based trader said.

However, all that has come after a significant reduction in supply from refiners, who reduced their HSFO output following IMO 2020 ahead of the expected loss of bunker demand.

Compounding that was the reduction in global demand for oil following the coronavirus pandemic. Refiners reducing their utilization rates affected the amount of fuel oil produced.

Indeed, in its monthly report on the state of the industry, the International Energy Agency noted that HSFO has been supported by falling supply due to refinery run cuts.