In International Shipping News 11/11/2016
The low sulfur fuel oil physical Med-North spread fell to a more than six-month low of $1/mt Wednesday amid strong supply in the European region and little in the way of demand, according to traders.
The last time the physical Med-North print was lower was in mid-April when it reached $0.25/mt.
“Market is very heavy with supply right now, usual demand…little bit skeptical”, said one fuel trader. “We’re very well supplied right now, especially in the Med.”
“Were getting to December now, and no one wants any inventories on their book so everyone is trying to get rid. Even though we are now in a contango market, producers would rather sell their cargoes, than play the contango,” the trader added.
Typically, oil and trading companies will empty inventories for accountability and tax purposes before the beginning of the new year.
Meanwhile, the physical Hi-Lo spread has also plummeted to a four-month low on the back of a well supplied Northwest European market, in addition to a stronger barge market in the north.
“The entire low sulfur complex is looking weak right now,” a second trader added.
Source: Platts
