High Sulphur Fuel Oil contracts saw continued strength over the past two weeks. The Jun’25 3.5% barge crack saw a strong rally in April, peaking above -90c/bbl before consolidating around -$1.55/bbl by 09 May. Open interest is elevated, 7% above the 5-year average, with speculative buying seen during the rally, though trade houses sold into strength, holding a net short position of over -1.1mb vs. Onyx. The Jun’25 380 East/West also surged from $12/mt to $25/mt—the highest since February—driven by strong Eastern spread buying and improving positioning, though trade houses continued to sell. Visco weakened, falling from $14.25/mt to $11/mt, as 380 strength outpaced 180, and majors/trade houses increased short exposure, especially in Q3’25.
In the fortnight ending 09 May, Very Low Sulphur Fuel Oil was also extremely strong. The Jun’25 0.5% barge crack rallied from below $3.00/bbl to nearly $6.00/bbl by early May, supported by strong spread buying and increased open interest, which nearly doubled over two weeks. Trade houses remained net short and added to positions, particularly in Q3 cracks. Broader VLSFO strength was led by Eastern markets, with significant buying in Cal’26 and Cal’27 cracks, pushing OI more than 50% above the 5-year average. While prompt net positioning came under pressure as both end users and trade houses sold into the rally, sustained curve buying—including in 2026 spreads—helped maintain support.
