Fuel Oil

Market Overview

"War premium” has gone, but AG summer burn a key support

Fuel Oil

380 E/W had been weakening considerably in recent weeks in anticipation of rising HSFO availability following a peace deal, but pricing has actually found a floor and is seeing support in recent days.

Peak summer power-gen demand in the Middle East is likely a main factor capping the narrower E/W.

Summer burn in Saudi Arabia (Red Sea especially) could pull on European cargoes, as it has in previous years, and would also be an effective way for vessel owners to bring ballast capacity into Red Sea ports such as Yanbu for subsequent crude loads, this would help AG pricing relative to Rotterdam HSFO.