EUROPE & AFRICA RESIDUAL AND MARINE FUEL: Key market indicators
6th December 2021 13:26 GMT

European fuel oil traders have reported tightness across both high and low sulfur grades of late, with the ongoing outage at the Portuguese Sines refinery leaving the West Mediterranean market short about five cargoes of VLSFO in December.

Loadings of European fuel oil in the week to Dec. 3 totaled 565,380 mt across 19 tankers, according to data from Platts cFlow trade-flow analytics software and Kpler shipping data.

Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp region rose 13% to 1.273 million mt in the week to Dec. 1, Insights Global data showed.

Fuel oil stocks in the region represented 25.6% of total refined oil products stocks in the region, which is higher than last week's percentage share at 23.4%. The four-week rolling average is 1.156 million mt, which reflects an 8.4% drop compared with the average at the start of the year.

 

Marine fuel

 

FOB Rotterdam 0.5%S marine fuel barges were assessed at $507.5/mt on Dec. 3, up $2.50/mt week on week.

The premium for delivered 0.5%S marine fuel over barges at Rotterdam rose $10.50/mt week on week to $25.50/mt.

In downstream bunker markets, availability of 0.5%S marine fuel was tight across Northwest Europeand expected to remain so until Dec. 8. Increased arbitrage opportunities to the East have contributed to tightness at ARA ports.

 

High sulfur fuel oil

 

FOB Rotterdam 3.5% fuel oil barges finished the week to be assessed at $375.25/mt on Dec. 3, down 50 cents/mt from the previous week.

European residual fuel exports to the US in November fell 44% month on month, according to Kpler, which said 1.018 million mt of European residual product was shipped to the US.

Most of the product came from Russia, which exported 732,000 mt. The majority of the flow was HSFO, although some high sulfur straight run and high sulfur vacuum gasoil were also included in this mix.

Demand for high sulfur bunker fuel was muted on the week across ports, with tightness seen in Istanbul and Hamburg. Prices were volatile across the week, as bunker markets reacted to drops in the wider oil complex.

The differential between 0.5%S and 3.5%S fuel oil -- the Hi-5 bunkers spread -- widened on the week by $20/mt to $148/mt at Rotterdam. The Capesize scrubber premium rose $587/day to $6,074/day during the same period.

 

Feedstocks

 

The European VGO market has seen lackluster demand of late, partly for year-end inventory reasons, sources said, adding the arbitrage to the US had become more workable in recent trading sessions. Traders also pointed to reduced or halted operations at distillate hydrocracker units as the drivers behind muted demand for VGO, an effect likely to continue this week.

"The end-of-year pressure on stockpiles is definitely there," a European feedstock trader said Dec. 3. "Nobody is buying right now. And it is not helping that distillate hydrocrackers are not running either." A second trader said the arbitrage to the US Gulf Coast appeared to have opened, though whether there will be buying appetite from US Gulf Coast refineries remained to be seen.


Bunkerworld ,
6th December 2021 13:26 GMT