Cracks for HSFO barges in ARA correct higher across the curve

London (Quantum Commodity Intelligence) - European high sulfur fuel oil cracks are correcting higher across the curve in early trade Wednesday, extending the shift in direction seen on Tuesday evening, broker and Quantum data shows.

The latest Fujairah stock data supported the rally, with residual fuel oil stocks down 1.7 million barrels to 11.87 million barrels over the week to May 24.

Residual stocks in the United Arab Emirates port jumped 5 million barrels over a two week period in April, rising from under 10 million barrels on April 12 up to 15 million barrels on April 26, triggering a collapse in European high sulfur fuel oil cracks.

Cracks for June HSFO barge swaps in ARA versus Brent have tumbled from -$7.50/b in late April down to -$11.85/b on Monday.

The nearby paper crack has now rebounded to -$11.25/b at the time of the Singapore market close at 0930 UK time Wednesday, up $0.25/b from Tuesday evening which was up $0.35/b from Monday.

But the correction in the high sulfur fuel oil curve extends across the curve.

July, August and September cracks were up $0.29/b, $0.31/b and $0.32/b respectively Wednesday morning compared to Tuesday, broker data shows.

The biggest moves have occurred in 2022, 2023 and 2024.

Paper for HSFO cracks in the fourth quarter of 2022 was up 37 cts/b Wednesday morning, 2023 paper was up 41 cts/b, and 2024 cracks were up 43 cts/b.