The physical Med/North high sulfur fuel oil spread — the difference between FOB Mediterranean cargoes and FOB Rotterdam barges — has hit a six-week high as a result of strong bidding interest.

The spread hit $1.50/mt late Tuesday, a rise of $2.25 on the day, after reaching lows of minus $2.25/mt in the last 10 days of February.

The HSFO complex in the Mediterranean was bearish for most of February, with differentials negative due to an oversupplied market.

However, a recent strong surge in buying interest, namely from Cadoil, has provided premiums in the Med with an upward push.

“The market is looking more balanced, not seeing the kind of length we did a few weeks back”, said one trader in the Med.

A second trader said: “We’re seeing some spots of demand, let’s see if this lasts,” adding: “Bunker demand is good.” Additional support is coming from the spring refinery maintenance season in the Med, sources said.

Meanwhile, on paper, the March Med-North spread has jumped up from a low of minus $2.50/mt in early January to trade at minus $1.00/mt, according to ICE data.

Cadoil were seen bidding in the S&P Global Platts MOC process on Tuesday for a CIF delivered Malta cargo for March 10-14 at flat.

Source: Platts