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Market Overview: Fuel Oil

Fuel Oil activity has been quiet in August but in general the market is still very strong and tight across the globe. Spreads reflect this and Rotterdam and Singapore spreads do not show any sign of abating. Arb activity has been very slow with only Suezmax activity. Fuel oil storage inquiries are still on the low side but some interest is arising in Singapore.

Spreads remain well bid. Oct18/Dec19 is close to 120 USD backwardation but that doesn’t scare off players that already have tanks. They stay on their position while new players come out to check availabilities in ARA, which are tight. Premiums for Fuel oil remain high and there is quite some activity on the E/W with so far one VLCC and more than 10 Suezmax’ that have been booked.

Market Overview: Gasoline

With the end of the gasoline season in sight and refinery runs above 96%, the gasoline curve is slowly coming off again. Storage requests are increasing with an eye on the spec change. Availabilities are still there but opportunities with the full monty are getting more scarce.

Spreads are coming off again after the spec change and volumes to the AG are decreasing again after a flurry of exports on the back of outages. The arb to the US is closed so this could indicate that Europe will have plenty of material soon. Whether this will last long remains the question. Refinery utilization is roughly 90% but refinery margins are decreasing rapidly so we might see early maintenance and/or lower runs in the coming months to correct the imbalance. Cargo owners are sniffing around for storage but econs do not work just yet. Players with storage are staying put. Most cargo owners with specific storage requests prefer somewhat smaller tanks.