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Fuel Oil Report – Barges Drifting

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HSFO

Overall, European HSFO has been trading sideways in the past fortnight.

The July 3.5% barge crack has had a fairly rangebound week, trading between -$8/mt and -$7/mt.

The July 380 E/W experienced a major rally in the first week of the past fortnight, rising to over $19/mt, before promptly falling to $10.50/mt by June 07. Trade houses flipped their positive net position on the contract on June 13, potentially indicating impending bearish price action.

The prompt July VISCO spread has been pressured down aggressively in the fortnight, declining from $11.25/mt on May 31 to $7.75/mt on June 14 amid a reduction in net positioning from both end users and majors/NOCs.

VLSFO

Despite not seeing price action quite as sideways as HSFO, the past fortnight still saw a more muted week of price action for VLSFO, with neither European nor Asian grades recording major moves in either direction.

The July 0.5% Barge crack has experienced a week of flat price action following a slightly more active week from May 31 to June 06.

The Jul Sing 0.5% crack ticked up slightly over the fortnight following a mixed first week that saw its price rise to $9.25/mt and then drop to $8.25/mt

The prompt VLSFO E/W has strengthened steadily throughout the fortnight from $40/mt to $43.50/mt, also seeing a marked increase in open interest from 4mb to 6.36mb.

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