HSFO
This fortnight in HSFO saw incredible bearishness in Europe turn to bullish sentiment amid a news on a reinstatement of sanctions on Venezuelan crude.
The month began with incredible bearishness for the European HSFO barge crack. However, the past week saw a sharp reversal in the barge complex, with the May crack rallying up from -$14/bbl up to -$10.85/bbl come Mar 18.
By contrast, the 380 E/W saw support throughout April. The first leg of the fortnight saw support on the back of weakening 3.5% barge cracks. However, the following week saw aggressive buying in Sing 380 spreads by trade houses. Despite this, the rally this week was much softer amid the strength in European HSFO.
VLSFO
VLSFO saw a remarkable come back from last week’s incredible bearish tones. This bullishness was further accentuated in Asia, which injected life into the 0.5% E/W.
The 0.5% barge crack weakened in the week to Apr 12, primarily due to the weakness in Sing cracks. The following week saw support amid the strength in Asia, however, the Euro crack found pressure amid selling in the May/Jun barge spread.
Sing cracks also saw a dramatic reversal in prices. Price action in May came off from $12/bbl on Apr 02 to $9.90/bbl on Apr 12, but rallied to $11.90/bbl come Apr 18. This buying was also intensified due to a potential bull play by a Singaporean trade house
In line with this, the VLSFO E/W mustered strength from Apr 11, after seeing prices prior to this.
We see Asian VLSFO’s strength relative to Europe be further evidenced in open interest data, which showcased a rise in risk in Sing VLSFO whilst the barges saw more risk off sentiment over the past week.
