The Mediterranean high sulfur fuel oil market has moved to its widest discount to Northwest Europe in four months amid ample supply, traders said.
Mediterranean FOB HSFO cargoes were assessed by Platts on Thursday at a $12/mt discount to Rotterdam 3.5% sulfur fuel oil barges, the widest discount since December 10, when it was $13/mt.
Traders attributed the widening discount to abundant supply in the Mediterranean as well as a closed arbitrage to the east, locking product in the region.
"The Med is long and low," a trader said. "In this kind of situation, cargoes would usually go east but the arb doesn't currently work. The market could stay low for some time."
Meanwhile in Northwest Europe, the Rotterdam 3.5% sulfur fuel oil barge market continued to lose strength Thursday after four VLCCs fixed for Singapore had provided it with support through late March/early April.
"Strength has come off a bit, but it is still relatively strong," a trader said.
