Fuel Oil Report – HSFO and VLSFO Meeting in the Middle

The narrowing scrubber spread was the key theme as there was diverging sentiment between the HSFO and VLSFO complexes, with the former turning bullish and the latter turning bearish. This is reflected in the narrowing of the Hi-5s (VLSFO vs HSFO contracts), with the Dec’24 Sing Hi-5 (Sing 0.5 vs Sing 380) falling from $110/mt on 25 Nov to $86/mt by 28 Nov. The price action was likely exacerbated by stop-outs, especially with open interest in both the Dec’24 Sing 0.5 and Sing 380 contracts sitting above their respective 5-year maximum levels. However, the current price trends in both complexes are overextended from a technical perspective, so it remains to be seen how long they will be sustained.