Fuel oil to Brent Crack Spread at Two-Year Low

by Ship & Bunker News Team
Friday January 16, 2015

The crack spread between U.S. residual fuel oil and crude oil has slid to its lowest levels in two years, Platts reports

While a global glut of oil has seen crude prices fall to their lowest point in five years, healthy demand for bunkers has reportedly kept prices for marine fuel steady.

"Or it's touching down in terms of flat price," said one fuel trader. 

The spread between Gulf Coast 3% sulfur fuel oil and Brent Crude fell to its lowest level since summer 2012, while the spread between Gulf Coast high sulfur fuel oil (HSFO) to Brent has tightened during eight of the last 10 trading days. 

Low oil prices have convinced many operators and owners to snap up bunkers for storage, with demand being good in the ports of Houston and New Orleans, according to sources. 

"You can see more deals done in both ports but most of them are for 50-100 mt, but still suppliers are still making money," said a trader.

It was reported earlier that even oil majors had moved in to store cheap oil while they can, hiring aging supertankers for long-term contracts to serve as floating storage.