Europe fuel oil weekly round up: HSFO prices and cracks rally more than 0.5%

23 Jul 2021

Quantum Commodity Intelligence - High sulfur fuel oil barge prices rose $5/mt on the week while marine fuel 0.5% fell $6.25/mt in a dynamic that has narrowed the spread between the two fuel grades to a 4-week low of $109.75/mt.

Marine fuel 0.5% was assessed at $508.75/mt, while 380cst 3.5% was valued at $399/mt FOB ARA.

The lower crack for marine fuel erased three weeks of gains for the distillate blend, while high sulfur fuel oil cracks rose for the second successive week.

Both of the ARA barge markets remained in mild backwardation through the week, but while HSFO cracks strengthened from Monday as Brent recovered from its OPEC+ triggered lows, gaining to -$8.95/b Friday from -$9.80 a week earlier, the marine fuel 0.5% crack was flatter and its discount versus Low Sulfur Gasoil futures deteriorated.

After starting the week at a discount of $80.50 to August LSGO, the spread deteriorated to -$89/mt on Thursday and -$90.25/mt on Friday.

The spread between the two grades of barges in ARA averaged $111.50/mt over the week, down from around $124/mt a week earlier.

Fuel oil stocks were down around 180,000 mt to just over 1 million mt, down slightly from July 2019 when they averaged 1.1 million mt.