Europe and Africa residual fuel: Key market indicators this week
2nd March 2021 14:55 GMT

Rotterdam FOB 0.5% sulfur marine fuel barges finished the week assessed by S&P Global Platts at $475.25/mt on Feb. 26, up 5% from the previous week.

Marine fuel

** Support remains on lower sulfur fuel oils, as reduced refinery runs continue to dampen resupply which in turn has lent support to 0.5% marine fuel and 1% fuel oil cracks.

** The 0.5% sulfur crack spread was last assessed at $9.43/b on March 1, down 4% on the week. The 1% sulfur crack was last assessed at $2.50/b on March 1, up 16% on the week.

** Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp region, as measured by Insights Global, edged 1.3% lower to 1.636 million mt in the week to Feb. 25, following a similar 1.1% fall the previous week. The Insights Global data does not provide a breakdown of fuel oil types.

High sulfur fuel oil

** Rotterdam 3.5% sulfur fuel oil barges on a FOB basis finished the week assessed at $365.50/mt on Feb. 26, up 2.3% from the previous week.

** Support for marine fuels remains constrained to the lower sulfur grades, with 3.5% sulfur FOB Rotterdam cracks continuing to edge lower amid more limited demand in the market, sources said.

** The 3.5% FOB Rotterdam barge crack was last assessed at minus $7.54/b on March 1, up 7% on the week.

** While fundamentals diverge between low and high sulfur products, the spread between 0.5% and 3.5% sulfur FOB Rotterdam barge cracks -- known as the Hi-5 crack spread -- has widened, to be assessed Feb. 26 at $17.28/b. It was last seen wider on March 12 last year at $21.42/b. During the initial stages of the coronavirus pandemic, the spread narrowed to $7.64/b as of June 4.


** Cargoes of European high sulfur vacuum gasoil have been proven higher in the Platts Market on Close assessment process, despite refinery outages on the US Gulf Coast.

** “The refinery outages caused motor gasoline and distillates cracks to rally globally, so margins improved in Europe and hence demand for VGO was also supported. The VGO arbitrage to the US has been muted, it is European VGO demand that is more important than the US [for determining European VGO values] at the moment. European demand is the main driver at the moment I think, and it is relatively strong here,” one European feedstocks trader said.

** Constrained refined product supply has also been cited as a reason for higher feedstock values. "Refinery outages are creating a gasoline demand spike in the US, which in turn creates a VGO demand spike," another source said.

Platts ,
2nd March 2021 14:55 GMT