London (Platts)--7Feb2013/614 am EST/1114 GMT
The European hi-lo physical and swap spread, the premium of 1% FOB NWE cargoes over 3.5% FOB Rotterdam barges, has reached a four-month high this week on increased buying appetite on the low sulfur fuel cargo market, according to traders and Platts data. The physical hi-lo spread was assessed Wednesday at $37/mt, the highest value since October 11, when the market was assessed at $37.25/mt. The front-month swap was assessed at 39.50/mt, the highest value since October 3, when the market stood at $40.50/mt. An increased buying appetite for both physical cargoes and LSFO swaps instruments demonstrated during the Platts Market on Close assessment process gave support to the market this week, amid ongoing lackluster demand, market sources said. Demand in Northwest Europe remained low, traders said, while shorts in the Mediterranean were largely covered, with only some traders saying the arbitrage to the East was still pulling European barrels amid low European stocks. Article continues below...Sign up to European Marketscan today. 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 European hi-lo physical and swap spread, the premium of 1% FOB NWE cargoes over 3.5% FOB Rotterdam barges, has reached a four-month high this week on increased buying appetite on the low sulfur fuel cargo market, according to traders and Platts data. The physical hi-lo spread was assessed Wednesday at $37/mt, the highest value since October 11, when the market was assessed at $37.25/mt. The front-month swap was assessed at 39.50/mt, the highest value since October 3, when the market stood at $40.50/mt. An increased buying appetite for both physical cargoes and LSFO swaps instruments demonstrated during the Platts Market on Close assessment process gave support to the market this week, amid ongoing lackluster demand, market sources said. Demand in Northwest Europe remained low, traders said, while shorts in the Mediterranean were largely covered, with only some traders saying the arbitrage to the East was still pulling European barrels amid low European stocks.
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 renewed buying interest for cargoes continued a second day in the Platts MOC assessment process on Wednesday, with Vitol again bidding for five 25,000-30,000 mt FOB Antwerp LSFO cargoes, of varying specifications. TOTSA and BP offered an FOB Antwerp cargo each, but there were no trades. Vitol was also bidding Wednesday for the front of the LSFO structure, showing a bid at a $1/mt backwardation and trading at this level. The LSFO balance-month/March spread was assessed at $1/mt backwardation, from parity on Wednesday.--Paulina Lichwa-Garcia, paulina_lichwa@platts.com--Ned Molloy, ned_molloy@platts.com--Edited by Jonathan Fox, jonathan_fox@platts.com
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