The pricing gap between 0.1%S marine gasoil and 0.5%S marine fuel -- both IMO 2020-compliant fuels -- has widened again at Rotterdam after the start of IMO’s sulfur cap rule earlier this year saw the two come almost within touching distance of each other.

This year has seen a whole spectacle of events for the marine fuel industry, amid tighter regulations on sulfur content -- which dropped the sulfur content on marine fuels from 3.5% to 0.5% in January -- as well as a global pandemic.

At the start of the year when the sector rushed to comply with the sulfur cap changes, price spikes for 0.5%S marine fuel indicated some preference for this low sulfur fuel, narrowing the pricing gap between it and the other alternate, more-expensive product, marine gasoil.

However, the price spikes for 0.5%S marine fuel were short-lived, as concerns over limited availability of the product did not materialize and the wider impact of the coronavirus pandemic on global oil demand dragged prices down.

Now, the pricing gap between marine gasoil and 0.5%S marine fuel at Rotterdam is almost three-fold higher than January's average at $59.78/mt in July, its highest since March’s average of $60.86/mt, S&P Global Platts data shows.

Fuel oil stocks in the region remain ample, adding to bearish fundamentals for 0.5%S marine fuel despite it dropping since May.

Fuel oil stocks in the Amsterdam-Rotterdam-Antwerp hub averaged 1.41 million mt in July this year, coming down 17.8% from May’s average but 28.1% higher compared to a year earlier, Insights Global data showed.

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

Meanwhile, demand in terms of bunker sales volumes at Rotterdam on the quarter in the April-June period saw volumes for 0.5%S marine fuel rise while marine gasoil fell, compared to the previous quarter in January-March.

Marine gasoil sales volumes dropped 10.3% quarter on quarter, while 0.5%S marine fuel rose by 10.3%, according to data from Rotterdam port authority.