London — Local demand for bunkering in the Northwest Europe market was sluggish but had picked up since the start of the year while price support for 0.5%S marine fuel was heard mainly due to pulls from Singapore.
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** Rotterdam 0.5%S Marine Fuel FOB barges finished the week to be assessed at 404.50/mt on Jan. 29, down just 75 cents/mt from the week ended Jan. 22.
** 0.5%S marine fuel and 1%S fuel oil continued to see demand from the East, as a cold snap and high LNG prices boosted fuel oil demand from power companies in Asia, sources said.
** As a result, European demand was heard to be concentrated more within the cargo market than barges, sources said. "Tanks aren't empty, but you need to pay up," one source said, attributing strength to the pull eastward and more limited refinery runs in Europe amid the coronavirus pandemic.
** Combined in-land inventories of very low and high sulfur fuel oil in land in the Amsterdam-Rotterdam-Antwerp region rose for the fourth consecutive week by 6% on the week to 1.454 million mt in the week to Jan. 27, Insights Global data showed. Inventory levels are at the highest levels since November, the data showed.
** Meanwhile, Singapore's commercial onshore residue stocks fell 5.5% week on week to a one-month low of 20.791 million barrels, or 3.27 million mt, Jan. 27, amid a decline in fuel oil imports and a surge in exports, Enterprise Singapore data showed Jan. 28.
** The support for lower sulfur fuels has seen the spreads between their higher sulfur counterpart widen. The Hi-lo paper spread -- the difference between the 3.5%S FOB Rotterdam barge swap and 1%S FOB NWE cargo swap -- was assessed at $53.50/mt on Jan. 29, over a 10-month high. Likewise, the physical spread between 0.5%S FOB Rotterdam and 3.5% FOB Rotterdam barges -- known as the Hi-5 spread -- was last assessed Jan. 29 at $94.50/mt after reaching a nine-month high the previous day at $97.50/mt.
** The bunker market reported some tightness in 0.5%S marine fuel availability on the prompt in the week ended Jan. 29 due to refinery run cuts, but the market continues to see lackluster demand for bunkering.
** Mediterranean bunker demand is expected to be on the rise, according to one shipping source, as ships begin to position there.
High sulfur fuel oil
** Rotterdam 3.5% fuel oil barges on a FOB basis finished the week to be assessed at $310/mt on Jan. 29, down 75 cents/mt from the week ended Jan. 22.
** Sources noted that the HSFO market in Europe was largely quiet, with some demand going to Spain for coker feed
** A Mediterranean source reported some pockets of tight availability of the product at Gibraltar in the week ended Jan. 29, while demand in Rotterdam continues to buck expectations.
** Rotterdam Port Authority data showed that HSFO took 34% of total sales at the port in Q4, equating to 29% in the year of 2020.
** Additionally, the differential between high sulfur fuel oil and very low sulfur fuel oil continues to remain wider in January compared to recent months, both in the bunkers market and the upstream barge market, S&P Global Platts data showed.
Feedstocks
** Cargoes of high sulfur vacuum gasoil were reported lower in the week ended Jan. 29, sources said. As market conditions are already tight, any additional demand disruptions was likely to affect price, traders said.
** The VGO Hilo spread was heard to have widened, as gasoline demand in the US and Asia has been relatively healthy, while demand for distillates and diesel in European nations has fallen, due to new lockdown measures in countries including France.
** Spanish HSVGO imports totaled 192,000 mt in January, up from 58,000 mt in December, a 231% increase.
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Europe and Africa residual fuel -- key market indicators this week - S&P Global
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