Rotterdam Hi-5 fuel oil spread hits three-month low
10th August 2021 15:41 GMT

The premium of very low sulfur fuel oil over its high sulfur equivalent at Rotterdam’s port fell to an over three-month low on Aug. 9, for the FOB barge assessments, as the latter stayed resilient to bearish fundamentals in the global oil complex.

In Rotterdam, the premium of 0.5% sulfur bunker fuel over 3.5% fuel oil on a FOB barge basis, also known as the Hi-5 barge spread, was assessed at $100.25/mt on Aug. 9, S&P Global Platts data showed. The premium has contracted 21% since multi-month highs in early July, reaching its lowest levels since April 30.

Brent crude oil prices, which the refined oil products track, have dropped 9.9% since July amid the resurgence in COVID-19 cases, particularly in Asia.

Meanwhile, 0.5%S marine fuel saw some support but largely tracked the complex, falling 9.5% over the same period. On the other hand, 3.5%S fuel oil resisted some bearish fundamentals, falling only 7.6%, the data showed.

Combined stocks of fuel oil products in the Amsterdam-Rotterdam-Antwerp rose 16% in the week to Aug. 5, strengthening from a 16-month low two weeks previously.

This drop was mirrored by the fuel oil swaps market, with the paper Hi-5 last being assessed at $110/mt on Aug. 9, down from a 2021 high of $123/mt on July 7 and the lowest level since June 28. A similar dynamic was observed in the Hilo spread – the differential between 3.5% sulfur and 1% sulfur swaps. It was last assessed at $56.75/mt on Aug. 9, the lowest level since July 6.

In the Mediterranean, tightness on high sulfur fuel oil in the Mediterranean has been in place for the last month, pushing prices up. This is expected to last until the end of the summer season at least, market sources said.

Bunkerworld ,
10th August 2021 15:41 GMT