HSFO
Muted flows were seen in Eastern HSFO with 380 cracks in a range whilst Europe found support amid the front spread exiting contango territory.
The Jul 3.5% barge crack saw positive price action on the back of buying noted in the Q3’24 tenor. However, we saw end users selling nearly 50kbbls of the Jul crack to Onyx this week.
The Jul 380 E/W appeared to show signs of cracking in an otherwise incredible bull run this week with prices plummeting $4.50 on May 23 to $13/mt. We saw heavy selling in the contract by end users, trade houses and Chinese players.
The prompt Jun VISCO saw trade houses buying nearly 630kbbls from Onyx over the past fortnight alongside refinery and market maker buying. Despite this, the contract fell to $8.75/mt.
VLSFO
The first week of the fortnight saw a collapse in VLSFO in both Asia and Europe on the back of a weaker physical window and lacklustre demand. The following week saw more muted market action, especially in Europe, although Sing 0.5 spreads found support.
It’s been a bearish two weeks in Euro VLSFO with the Jul barge crack collapsing to $2/bbl. While trade houses flipped to being buyers this week, they subducted 160kbbls from this position on May 23.
The Jul Sing 0.5% crack fared better than Europe despite falling $1.60 in the first half of the fortnight to $8.30/bbl following which it has been incredibly rangebound. We saw end users flip to buying on May 30 whilst trade houses continued to sell the contract.
The VLSFO E/W saw more strength this week, rallying to an intraday high of $40.50/mt on May 31 where it met resistance. Trade houses have been buyers of the contract, adding 190kbbls between May 27-29.
