Rotterdam HSFO flat price above 5-month high; traders eye imports


FOB Rotterdam 3.5% sulfur fuel oil barges soared above a 5-month flat price high on Friday, assessed $2.00/mt higher at $613.50/mt. They were last higher on February 25 at $618.50/mt.

"A lot of people are looking at bringing fuel oil into Rotterdam, but are wondering whether current levels are sustainable," said one trader.

"I would love to sell a cargo of RMG into this market, but I don't have the tank space to sell barges, its all RMK."

The surge in the HSFO barge price outpaced the gains in crude over a similar three-day period, leading to a rising crack; the discount of 3.5% sulfur FOB Rotterdam fuel oil barges to ICE Brent front-month crude futures widened by $0.56/b Friday to reach minus $12.23/b, a one-month high.

Large export volumes loading early August have been fingered by some traders as tightening the barge market, as well as Handysize cargoes down into the Med, partly to meet Egyptian demand.

However, the strong buying interest on fuel oil barges and resultant backwardation has confused some traders, who don't see the move as justified by fundamentals.

One trader said the $11/mt backwardation "was already crazy, so people who went short at that level had to stop-loss and so on."

Balance-month/September was trading at $21/mt through Monday morning, bid on at $21/mt at 12.00 London time.

Source from : Platts