Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp hub fell 13.8% to 1.255 million mt in the week to July 30, according to data from Insights Global, despite market sources citing poor demand during the week.

Sources have also cited more limited production.

The Insights Global data does not provide a breakdown of fuel oil types.

Following the coronavirus pandemic, demand has failed to recover in line with the easing of country lockdowns in Europe. Ongoing fear of second wave of the virus is clouding outlooks, leading many to await direction in the coming weeks.

"We are just waiting out this time, there is no real demand," a source said for 0.5%S marine fuel.

Another source noted the market was "super quiet", pining this down to the summer lull period as well as depressed bunker demand.

Meanwhile, on 3.5%S fuel oil there is strong demand pulling for use in utilities in Saudi Arabia and as coker feed in the US Gulf Coast, leaving limited availability locally.

"There is no product in the Mediterranean and demand is strong especially from utilities," a source said.

Bunker demand at Rotterdam has been low, sources said through the week.

The continued weak demand and ample availability of 0.5%S marine fuel has put further pressure on prices in the prompt, resulting in the M1-M6 contango in the swaps market strengthening from minus $13/mt on July 22 to minus $17.75/mt assessed July 30.

Conversely, the backwardation in the 3.5%S fuel oil swaps market moved from 50 cents/mt on July 22 to $5.50/mt on July 30, reflecting the tightness in the market.

As a result, the spread between August 0.5%S and 3.5%S FOB Rotterdam barge swaps was assessed at $55.50/mt July 30, down from $69/mt a week earlier.