The summer lull and muted demand for fuel oil compared with pre-coronavirus pandemic levels meant European market fundamentals remained little changed.
0.5%S marine fuel
**Supply of 0.5%S marine fuel remained ample as outlooks were clouded by concerns about a second wave of COVID-19.
**FOB Rotterdam 0.5%S marine fuel barges were assessed at $297.75/mt on Aug. 7, up from $292.00/mt on July 31.
“Both [the Amsterdam-Rotterdam-Antwerp hub] and the Mediterranean look weak,” a source said. A second source agreed, adding there was no demand in the Mediterranean.
**Inventories of very low and high sulfur fuel oil in the Amsterdam-Rotterdam-Antwerp region rose 8% to 1.356 million mt in the week to Aug. 6, according to data from Insights Global.
**Export outlets east remained muted with Singapore well supplied. “[VLSFO] arbitrage arrivals from the West [to Singapore] are expected to slow to 1.5 million-2 million mt in August,” S&P Global Platts Analytics said in a recent Asia-Pacific Weekly Recap report.
** FOB Rotterdam 0.5%S barge cracks fell to $3.04/mt Aug. 7 from $3.53/mt a week earlier, as front-month 0.5% swaps dropped 75 cents/mt to $304.75/mt.
**Demand for bunker fuel in Northwest Europe varied last week.
**The average pricing premium for 0.5%S bunkers delivered Rotterdam over 0.5% FOB Rotterdam barges was $9.50/mt in July, less than half February’s average at $26.24/mt and the lowest monthly average since S&P Global Platts started assessing it a year ago.
**Volumes of liquid bunker fuel consumed in Spain ion June fell 28% year on year to 473,362 mt. The port with the highest volume was Las Palmas, which saw 187,275 mt bunkered in June, and the smallest year-on-year decrease -- of 2% --- among the biggest ports.
**The ports with the next largest volumes of bunker demand for the month were Algeciras, which saw volumes fall 35% to 116,841 mt, and Barcelona, which saw volumes fall 55% to 58,981 mt, the government data showed.
High sulfur fuel oil
** FOB Rotterdam 3.5% fuel oil barges were assessed at $243.00/mt on Aug. 7, down $1.00/mt week on week and after reaching a peak of $254.00/mt on Aug. 5
** With demand weak, the majority of Baltic Sea product was avoiding the ARA region and heading westwards, sources said.
** HSFO has seen a pull across the Atlantic to the US since the start of 2020, for use in cokers
** In July, 46% of all HSFO leaving the Baltic Sea made its way to the US, according to commodity data company Kpler, totaling more than 7.10 million barrels. For the first seven months of 2020, on average 35% of the product has been making the voyage, up from 11% for the same period of 2019.
** The front-month 3.5%S fuel oil barge crack fell to minus $6.91/mt Aug. 7 from minus $6.19/mt on Aug. 3 for the front month, as the September swap fell $2.25/mt to $241.50/mt.
** The spread between 380 CST FOB Singapore cargo and 3.5%S FOB Rotterdam barge swaps -- the East/West -- remained in the middle of the range traded since beginning of July, being assessed at $10.25/mt on Aug. 7.
** In the feedstocks market, LSSR remained bound by movements in 0.5%S marine fuel, as it continues to be reliant on blending in the bunker pool while demand from refineries remains at very low levels, according to sources.
FOB NWE 0.5%-0.7%S straight run cargoes were assessed at $297.25/mt Aug. 7, down 75 cents/mt on the week.
** Vacuum gasoil markets quietened in the first week of August, following a period of higher buying activity of HSVGO in particular in mid-July.
Prices remained stable, supported by rises in Brent, with CIF NWE 0.5%-0.6%S and 2%S VGO cargoes assessed at $325.75/mt and $324.25/mt, respectively, on Aug. 7, up $1.50/mt and $1.75/mt on the week.