12SEP2019 - NEWS - ARA bunker market tightens amid backwardation

Bunker grade high-sulphur fuel oil (HSFO) supply has tightened in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub in northwest Europe as backwardation in the swaps market reached its widest on record this week ahead of the International Maritime Organisation's (IMO) 0.5pc sulphur cap.

Multiple bunker suppliers faced HSFO shortages and said this could persist until next week. One bunker supplier said it had prompted regional refiners to answer as to when they would resume supply, but was told that it would not receive bunker fuel oil until 13 September. The bunker supplier will then load at a jetty and expected to supply shipowners by 16-17 September.

While bunker fuel oil supplies will be dry until at least next week, marine gasoil (MGO) can be supplied in 2-3 hours from the order, a bunker supplier said.

Rotterdam barge swaps reflected the spot tightness in the market. The premium of September barge swaps to the October product reached $44/t on 9 September, the widest since 1993 when Argus started assessing prices. Delivered bunker premiums in ARA reached $12/t today against Rotterdam barges.