Market and product

The premium of high sulfur fuel oil FOB Med cargoes to FOB Rotterdam barges narrowed Monday from the previous week, although a tighter Mediterranean meant participants might still look for arbitrage opportunities between the two regions, despite a volatile spread, sources said Tuesday.

FOB Med cargoes retraced to a premium of $0.50/mt against Rotterdam barges Monday, closing at $204/mt. Over the previous week they had reached a premium of as high as $3/mt.

"There is not a lot of product around in the Mediterranean," a trader said Tuesday, adding that conversely stocks in Rotterdam were looking healthy and loadings for exports towards Singapore seemed to have slowed down, suggesting there might be more volumes coming into the Mediterranean moving into October.

Nevertheless, he said at current levels the arbitrage was not entirely workable.

Other sources said exports on that route might work for bigger vessels.

Shipping sources had reported earlier on Friday that the 80,000 mt Minerva Helen vessel had been fixed by Cadoil on the Rotterdam-Algeciras route for loading October 1.

Cadoil declined to comment.

The market was looking a little tighter in the Med for October, due to lower volumes available out of Turkey, Israel and Greece, sources said.

A second trader said, however, Tuesday that this spread was a matter of one market being less bearish than the other rather than a bullish Med and that, compared with a year ago, the market overall looked tangibly more bearish.