Rotterdam 0.5% sulfur marine fuel FOB barges finished the week at $482/mt on May 28, up from $459.00/mt in the previous week.

Marine fuel 0.5%S

• The premium for delivered 0.5% sulfur marine fuel to barges at Rotterdam widened from the previous week from $6/mt to $10/mt on May 28.
• Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp region saw a marginal increase of 0.5% to 1.220 million mt in the week to May 27, according to data from Insights Global, after a 4% drop the previous week. Stock levels in the week prior were at their lowest since Jan. 14.
• The fuel oil market in Northern Europe was heard more balanced compared with the Mediterranean, according to one trader. Healthy gasoline and diesel margins incentivized increased production from Mediterranean refiners, which meant additional residual fuel oil supply in the region.
• Increased Chinese production was hampering arbitrage opportunities from the Mediterranean to Singapore additionally which was pressuring premiums, a trader said.
• Bunkering activity in the ARA area picked up towards the end of the week ending May 28. Similar sentiment was reported at east Mediterranean ports, while the west Mediterranean continued to suffer from poor demand.
• Traders said that availability of bunker product had not been an issue in Northwest Europe in previous weeks.

High sulfur fuel oil

• Rotterdam 3.5% fuel oil barges on a FOB basis finished the week to be assessed at $369.50/mt on May 28 up $18.50/mt from the previous week.
• High sulfur product in the Mediterranean region was experiencing low demand, while availability in the North was tighter, European fuel oil traders said.
• Physical traders in Northwest Europe had not seen any notable fall in HSFO demand in the region, with physical traders labelling it as balanced. HSFO bunker demand remained fairly strong, according to bunkering sources.
• The differential between 0.5% sulfur and 3.5% sulfur fuel oil, the Hi-5 bunkers spread widened to $112/mt at Rotterdam, compared to $102/mt in the week prior. The Capesize scrubber premium dropped marginally from $3,459/day to $3,420/day during the same period.
• High sulfur fuel oil in the Mediterranean bunkers market was heard tight at various west Mediterranean ports last week, according to market sources.

Feedstocks

• A European feedstock trader indicated on May 28 that values for HSVGO in the Mediterranean had been rising due to reduced supply coming out of Russia, which produces the vast majority of European VGO. “The closure of the Antipinsky refinery has really slowed down flows. Additionally, the government wants to keep gasoline stocks high, and even though they have not officially banned exports, they will dissuade refineries from exporting both gasoline and the feedstocks used to produce it,” said the source.
• One Europe-based trader said they had seen 0.5% LSSR being sold to refining units with fluid catalytic cracking units. “Refiners are reacting to higher FCC margins, and this value is well above the 0.5% marine fuel oil,” they added. However, a different trader said: “There is no demand for LSSR as a feedstock right now. FCC margins are going up, but refineries want to use LSVGO [low sulfur vacuum gasoil], rather than LSSR.” This second source added that while some refineries do prefer LSSR due to their specific configuration, they tend to purchase it infrequently.