ARA fuel oil stocks up 16.7% on week to 1.233 mil mt: Insights Global
11th September 2020 21:35 GMT

Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp hub, as measured by Insights Global, rose 16.7% to 1.233 million mt in the week to Sept. 9.

That followed a 4% fall the previous week to 1.057 million mt. The Insights Global data does not provide a breakdown of fuel oil types.

Pressure was heard on the availability of 0.5%S fuel oil as a shortage of blendstock was limiting production, a source said. Noting bullishness came from the supply side, as such, and demand remained poor, traders said. "We see the market pretty bullish on 0.5%S fuel oil...also [there are] not much in the way of [blendstock] components available."

Supply of some feedstocks, namely low sulfur vacuum gasoil and low sulfur straight run fuel oil, were sufficient, traders said.

Buying appetite remained weak but was firming slightly due to the contango structure in the market, the trader said.

In the paper market, the VLSFO timespread between the balance month to the front month was assessed at minus $3.75/mt with M1-M2 assessed at minus $1.50/mt on Sept. 10. This saw a notable weakening from the start of the week, which saw M1-M2 assessed at minus $6/mt.

However 0.5%S FOB Rotterdam barge cracks remained largely flat across the week, hovering between $1.60-$2.50/b, with the latest assessment at $2.43/b.

Supply-side tightness had not yet been felt in the Northwest European bunker market however, with availability of both products heard to be normal, despite delays at the beginning of the week causing some temporary tightness in VLSFO which appeared to subside by Sept. 10, according to sources.

Demand in the bunkers market remained at pre-coronavirus levels, sources said, with most changing dynamics evolving from the supply side.

On 3.5%S fuel oil, sources continued to highlight more limited availability of the product particularly in the Mediterranean. Bunker demand for the fuel there remains present, despite IMO 2020’s sulfur cap rules this year.

In the forward curve, HSFO remains in a $4/mt backwardation for the remainder of 2020, with prices expected to increase in the third month of 2021.

Bunkerworld ,
11th September 2020 21:35 GMT