HSFO
The HSFO complex saw huge swings in price action which ultimately culminated in a softening of the East/West on fears of poor Chinese demand at these higher flat price levels (around $480/mt in the prompt 380).
The 3.5% barge crack has been predominantly rangebound over the past fortnight. Barge structure saw extreme weakness on Mar 08 on the back of stop outs on the Bal-Mar/Apr spread but found better support thereafter amid the drone attacks on Russian oil infrastructure.
Over the past two weeks, the 380 E/W market weakened, reaching $1.25/mt in the Apr contract on Mar 19; despite funds selling 63.5kbbls, trade houses added 190.5kbbls since Mar 19, with volatility rising and Apr approaching the upper Bollinger band amid renewed support.
VLSFO
The VLSFO complex saw weakness over the past two weeks – especially in the latter half of the fortnight – with Asia leading this weakness.
The 0.5 barges crack saw a volatile second week, with prices initially coming off from high $6/bbl handles to lows of $5.60/bbl come Mar 21. However, prices did bounce back swiftly surpassing the $6.50/bbl mark on Mar 22.
The VLSFO E/W saw prices plummet over the fortnight by nearly $10 over the magnitude of Asian VLSFO weakness relative to 0.5% barges. This downward price action was likely exacerbated by length stopping out – as indicated in a small d-o-d decline noted in open interest.
The Sing 0.5% crack substantially weakened over the fortnight. The first week was more stable amid stronger Brent but following this, large size selling in Sing 0.5% flat price which put pressure on the front crack, shifting it down from $13/bbl on Mar 20 to a low of $12.10/bbl the following day.
