Northwest European LSFO cargo premiums lowest in almost 4 years
London (Platts)--17Dec2012/848 am EST/1348 GMT
FOB Northwest European 1% sulfur fuel oil cargoes were assessed at a
$13.50/mt discount to equivalent front-month swaps Friday, their lowest
differential in nearly four years.
They were last lower on January 1, 2009, at minus $16.50/mt, Platts data
Traders describe a situation of increased supply in the region over the
last month, against a backdrop of weak demand.
"[There's] no utility demand, poor bunker demand, and all refineries are
back up from maintenance like Donges and Slagen," said one trader Monday. "So
stocks built, hence the steep contango"
Article continues below...
As well as low physical premiums, the oversupply of LSFO is also being
reflected in the swaps market, say traders.
The discount of front-month to second-month FOB NWE LSFO cargo swaps hit
minus $6.50/mt on November 29, its lowest in the two years since October 15,
Since then, there has been a slight recovery in LSFO swaps, leaving the
front-month/second-month spread at minus $4.25/mt as of Friday.
--Ned Molloy, firstname.lastname@example.org
--Edited by James Leech, email@example.com