HSFO
The HSFO complex has overall strengthened over the past fortnight, with notable strength concentrated in the East.
3.5% barge cracks saw price action lack real direction this fortnight. Prices initially collapsed as February ended, before aggressive bidding by trade houses saw prices retrace higher to -$10/bbl handles in the prompt on Mar 06. Nonetheless, this strength did not last as prices came off once again to print at -$11.60/bbl come Mar 08.
The 380 E/W reverted from the levels seen a month ago and prices became more supported with a notable rally seen in the week to Mar 07 amid aggressive buy-side interest from physical hedgers down the curve. The Apr contract traded from around -$8.50/mt on Mar 01 to $2.25/mt come Mar 07.
VLSFO
In contrast, the East saw a rather bearish week in VLSFO with the Sing 0.5% structure selling off rapidly on the back of physical selling from a trade house as well as stop outs in spreads.
Market participants were also seen rolling their Sing 0.5% spread length from Q2 into Q3.
There was a lot of MOC-driven price action in the 0.5% barge crack over the past week. Price briefly traded higher from last week’s lull in line with a stronger physical before correcting lower once more.
Still not much counterparty action being seen in the low sulphur E/W with end users seen on the sell-side and only trade houses looking to get long in the contract. On the other hand, trade houses have been the predominant driver of strength in the 0.5% barges complex, accumulating length in spreads and cracks over the past two weeks.
In line with the Sing 0.5 structure being hammered, the Apr Sing 0.5 crack came off from $15/bbl to $13.50/bbl by Friday. Meanwhile, the Apr E/W came off from over $50/mt to $46/mt levels within the week. Notably, the Bal-Apr and Apr/May E/W boxes fell into contango.
