The West-East fuel oil arbitrage margins declined notably this week, because of narrower price difference between Europe and Singapore and the growth in VLCC freight rates, C1 found.
The theoretical margin for shipping fuel oil from Europe to Singapore was US$1.02/mt this week, down by US$1.54/mt week on week, C1's data indicate.
The freight for a VLCC to ply from the West to Singapore climbed to around US$3.25-mil this week, or US$11.61/mt, up by US$0.54/mt week on week, said a source with an international shipping company.
Meanwhile, the price difference between September cargoes of European 380CST HSFO and Singapore 180CST high-sulfur fuel oil (HSFO) narrowed by US$3.375/mt to US$29.625/mt.
In Singapore’s swaps market, the viscosity spread between September 180CST and 380CST fuel oil narrowed by US$2.375/mt to US$9/mt in the period, which softened the decline in the arbitrage margins.
VLCC Cosmic Jewel was booked by Glasford this week, to load 270,000mt of fuel oil at the Caribbean on Aug 16 before shipment to Singapore, with the freight at US$3.25-mil, according to shipping sources.
