EMEA News
Northwest Europe RMK 500 Bunker Market Tight, Say Traders
According to high sulfur fuel oil traders, there is a supply shortage of RMK 500 bunker fuel in the Northwest European market, Platts reports.
Many of RMK's main suppliers, which include Royal Dutch Shell plc, BP plc, and Total SA have had little to no product to offer, traders were quoted as saying on Wednesday.
The same sources also said that Litasco SA, the trading arm of Russia-based Lukoil, is currently the only company with any supply.
Traders speculated that Shell's continued maintenance of its Pernis refinery in the Netherlands and increased deliveries to Singapore have both hampered RMK 500 availability in the area.
"RMK is a bit tight with the refinery maintenance, but it should improve by late October," one trader said.
Shell's Pernis refinery is also Europe's largest, and produces roughly 400,000 bpd.
The company declined to comment on operational issues last month, with the maintenance scheduled to end in November.
Other irregularities have also seen BP, who typically sells, join the buying side, with one source saying that the company has held off on blending RMK 500 in favour of blending RMG 380.
"There are better margins on RMG now," said the source.
Total, which usually sells on a contract basis, also made the leap to sell on the spot market.
Platts said the market tightness means that RMK 500 prices are higher on front dates, and they become marginally lower in the second half of October as conditions are expected to improve.
Demand for RMK 500 is also expected to rise in 2015 as new sulpher content regulations, which come into play January 1, 2015, lead to new blending practices.
