Subscriber note: Platts Corrects June 21 European Fuel Oil Market Commentary

Please note that the June 21, 2013, European Fuel Oil Market Commentary was incorrectly published in the European Marketscan and Platts Global Alert page 1599. The commentary as it should have appeared, in full, is below. Please send any questions or comments to europe_products@platts.com and pricegroup@platts.com

The FOB Rotterdam high sulfur fuel oil barge market closed the week marginally stronger versus the front-month swap. Structurally the market was in a contango, with the paper market still trading in a backwardation. In a contango market the more prompt dates trade lower than later ones. The physical premium was assessed at plus $1/mt over the front-month July swap. Meanwhile, the HSFO market had an eventful week for new arbitrage fixtures talk. On Thursday, rumors emerged about an Ultra Large Crude Carrier being fixed on the key Rotterdam-Singapore route. Another VLCC was also being heard put on subjects for beginning of July loading amid so far thin volumes being sent East. Market sources said arbitrage economics had started looking more profitable this week, but only barely for some. "Everyone has slightly different costs and views on stuff like losses. Capital cost also differs, [but] another $2-4/mt away I would say [is the level for the arbitrage to be open]," one market trader said. The FOB Mediterranean cargo market lost some of its premium versus North, but was still trading in positive territory amid healthy buying and lower supply locally, traders said. "The demand is high. It is the usual seasonal demand," one market trader said. Demand for power generation purposes from Saudi Arabia was one of the demand outlets. Egypt was also now buying HSFO -- of a different specification than that assessed by Platts -- and it was still tightening the local market. During the Platts Market on Close assessment process BP came in a new move to offer a 30,000 mt cargo basis Algeciras. The indication was competitive versus the Platts MOPS strip. Galaxy was also on the offer side in the process Friday while Lia and Cepsa were seeking to buy, but none traded. The Mediterranean low sulfur fuel oil market weakened dramatically, with aggressive cargo offers finding no buying interest. The 1% Med/north (FOB/FOB) was assessed down $10.50/mt at minus $1.75/mt. In the MOC, Glencore offered an RMG 2010 cargo, CIF basis Genoa, at FOB NWE 1% July assessments plus $19.00 without trading. Gunvor offered a high quality cargo of 0.90% max sulfur, 360 CST, 30 ppm aluminum and silicon, and 5 asphaltenes, CIF basis Malta, which failed to find a buyer at balance month FOB NWE 1% assessments plus $12/mt. Despite the absence of spot cargo buying interest, end-user demand was picking up in the Mediterranean for both utilities and bunkers, traders said, even while the arbitrage from the North looked closed. The Northwest European LSFO market strengthened, with cargoes assessed up $1/mt versus front-month swaps at a $1/mt premium. Activity was calmer in the NWE MOC process, with just one bid from Vitol for a slightly unusual 290 CST viscosity LSFO cargo, for loading July 1-5, reaching H1 July plus $6/mt, and one offer from BP of a 80 ppm metals cargo, all else Platts spec, for July 12-16 loading, which reached balance month plus $1/mt. Neither cargo traded. Meanwhile there were no LSFO barge offers in the MOC. (RRRR)