Northwest European low sulfur fuel oil cargo outright prices pushed up to their highest since mid-2008 as high crude oil prices, a closed arbitrage from the US and a lack of availability of low density blending components supported values, according to trade sources.
LSFO cargoes were assessed at $749.25/mt FOB Antwerp Friday, the highest since July 14, 2008, according to Platts data. LSFO barges were assessed at $755/mt FOB Rotterdam, the highest since July 15, 2008.
"Refinery production is small and the trans-Atlantic arbitrage has been bad for some time," said a trader. "[Amsterdam-Rotterdam-Antwerp] is an import market, and without the arbitrage from New York we get stronger."
The low sulfur tightness was also due to strong bunker demand for 1% sulfur material in Rotterdam, and to reduced refinery runs, according to trading sources, who said that refinery margins are not as good as they were a few weeks ago.
Locally, supplies of blend components is also tight, trade sources said, restricting the availability of on-spec low sulfur bunker fuel.
"On the prompt there is a lack of low density," one trader said. "Flows are coming in irregular waves and for now there is not that much flow on the prompt... I expect some to be coming in a week or two so it could ease but we will have to see."
