22-05-2018

Gothenburg bunker fuel premium over Rotterdam widens, supported by demand

The premium of 380 CST fuel oil at Gothenburg, Sweden, over Rotterdam, The Netherlands, hit its widest all year Friday, buoyed by strong demand at the Swedish port.

S&P Global Platts assessed Gothenburg 380 CST delivered bunker fuel at a $28 premium to Rotterdam, $12 wider on the day and its largest since October 17, 2017, when it was assessed at $31.

Gothenburg had strong demand at the end of last week, which gave extra support to prices that were already high on firm ICE Brent crude futures.

“Demand is quite healthy,” a local supplier said.

Platts assessed the 380 CST bunker fuel at Gothenburg at $467/mt delivered Friday, up $9 on the day and its highest since October 31, 2014.

At Rotterdam, however, bunker fuel prices dropped on the day Friday. Platts assessed bunker fuel at $439/mt delivered, down $3 on the day, falling from its highest value since November 3, 2014.

“Prices are dropping off now,” a local supplier said, as they tracked the softening ICE Brent futures through the day Friday.

A lack of demand was behind the price decline, but sources said buyers would have to bite the bullet and pay up soon, as they don’t see a steep price drop as likely.

“Demand is calm — everyone thinks prices are too high, but prices are unlikely to crash so they will have to buy,” a second supplier said.

Source: Platts

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