Russian bunker MGO hits over two-year high on tight supply

Marine gasoil (MGO) at the Russian ports of Novorossiisk and St Petersburg reached over two-year highs Thursday on tight supply.

S&P Global Platts assessed MGO at Novorossiisk at $615/mt delivered Thursday, up $35/mt on the day, its highest value since January 6, 2015. MGO at St Petersburg was assessed at $565/mt delivered, up $23/mt, its highest value since June 3, 2015.

“Gasoil [availability] is an issue in the Baltic and the Black Sea,” a buyer said Thursday, adding that this could be due to transport difficulties.

In St Petersburg only one supplier was able to offer Thursday, the buyer said, as other major suppliers were already fully committed and had no barge availability.

The weather at Novorossiisk Thursday was fairly good for this time of year, sources said, and is not currently having any effect on bunkering operations.

Price movements at St. Petersburg are believed to be subject to more factors than just the traditional staples of supply, demand and feedstock costs. “They are not going with the market, they have already decided what price they are going to sell at,” a buyer said, referring to allegations of cooperation on prices between local suppliers at St Petersburg. Regular buyers in the market previously told Platts that Russian suppliers have started to communicate with each other to determine where prices are set.

The premium of Novorossiisk MGO over ICE gasoil front-month futures reached a four-month high Thursday to be assessed at $58.25/mt, its highest value since July 7.

St Petersburg MGO is now at a premium to ICE gasoil front-month futures for the first time since August 15.

Platts assessed MGO at St Petersburg at a $8.25/mt premium to the front-month gasoil futures.

Source: Platts

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