London (Platts)--12Dec2012/803 am EST/1303 GMT
The high sulfur fuel oil FOB Rotterdam barge market weakened this week for prompt dates amid slow arbitrage to Asia and ample supply. On Tuesday the physical market fell to an $8/mt discount to the front-month HSFO swap, the lowest level the physical market reached against the front-month instrument in three years, Platts data shows. The last time the market was so weak against the front-month swap was on December 21, 2009, when it was assessed at an $8.75/mt discount. The dip on the physical market on Tuesday coupled with a widening contango on the balance-month and front-month HSFO swaps structure. Article continues below...Request a free trial of: European MarketscanEuropean Marketscan delivers everything you need to gain a full and clear 360 degree view of the European oil products market each business day. European Marketscan is the tool used by all the major players in the oil market. It provides trusted, reliable and comprehensive coverage of European refined oil product markets and ensures you are kept up to date with the driving forces behind the latest changes in key product prices.
The high sulfur fuel oil FOB Rotterdam barge market weakened this week for prompt dates amid slow arbitrage to Asia and ample supply. On Tuesday the physical market fell to an $8/mt discount to the front-month HSFO swap, the lowest level the physical market reached against the front-month instrument in three years, Platts data shows. The last time the market was so weak against the front-month swap was on December 21, 2009, when it was assessed at an $8.75/mt discount. The dip on the physical market on Tuesday coupled with a widening contango on the balance-month and front-month HSFO swaps structure.
Article continues below...
European Marketscan delivers everything you need to gain a full and clear 360 degree view of the European oil products market each business day. European Marketscan is the tool used by all the major players in the oil market. It provides trusted, reliable and comprehensive coverage of European refined oil product markets and ensures you are kept up to date with the driving forces behind the latest changes in key product prices.
The timespread between the two months was assessed in a $4.75/mt contango, widening from a $4/mt spread on Monday. "No one wants to buy December [swap]; there is a lot of oil around," one swaps trader said, adding that the strength of the market will depend on any new fixtures on the key Rotterdam-Singapore arbitrage route. "Otherwise, no-one is going to buy oil in the next two weeks," he said. Three very large crude carriers were heard fixed so far from Rotterdam to Singapore, according to market sources. One of them, the Maersk Neptune, was still forecast to arrive late in Rotterdam from the initial November 28 loading, according to Platts ship tracking software c-Track. A second VLCC, the Manah, was heard fixed for December 14 loading and was spotted heading to Rotterdam on Wednesday. Sarah Glory, the third vessel, was heard fixed for December 22 with options to carry crude from Hound Point. Market sources also reported a vessel called Dalian Glory put on subjects for the end of December, but the subjects were not confirmed Wednesday morning.--Paulina Lichwa-Garcia, paulina_lichwa@platts.com--Edited by Jonathan Fox, jonathan_fox@platts.com
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