US Gulf Coast 3% sulfur fuel weakened in the physical and swaps markets Thursday on low Singapore demand and a flood of M100, a Russian fuel oil, being offered in the market.
There is "a lot of Russian [M100] and Singapore not getting the boost [the] market was hoping for," a fuel oil trader said.
The trader mentioned that shipments of fuel oil from Iran (See story, 0916 GMT) and Europe are keeping the Singapore market well supplied, and that, in turn, is putting downward pressure on the Gulf Coast fuel oil market.
Gulf Coast 3%S in the physical market was assessed $1.15 lower at $105.05/barrel, while the June swap was assessed down $2.10/b to $104.55/b. The front-month swap has lost more than $3.20/b for the week.
The weakness in high sulfur fuel oil was evident as the balance-month/front-month spread in the swap market flipped to a contango structure. The backwardation between the balance-month May and June swaps narrowed 40 cents to minus 5 cents/b. The spread has narrowed 70 cents/b for the week.
