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Russian bunker MGO hits over two-year high on tight supply

Marine gasoil (MGO) at the Russian ports of Novorossiisk and StPetersburg reached over two-year highs Thursday on tight supply.

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S&P Global Platts assessed MGO at Novorossiisk at $615/mt deliveredThursday, up $35/mt on the day, its highest value since January 6, 2015. MGOat St Petersburg was assessed at $565/mt delivered, up $23/mt, its highestvalue since June 3, 2015.

"Gasoil [availability] is an issue in the Baltic and the Black Sea," abuyer said Thursday, adding that this could be due to transport difficulties.

In St Petersburg only one supplier was able to offer Thursday, the buyersaid, as other major suppliers were already fully committed and had no bargeavailability.

The weather at Novorossiisk Thursday was fairly good for this time ofyear, sources said, and is not currently having any effect on bunkeringoperations.

Price movements at St. Petersburg are believed to be subject to morefactors than just the traditional staples of supply, demand and feedstockcosts. "They are not going with the market, they have already decided whatprice they are going to sell at," a buyer said, referring to allegations ofcooperation on prices between local suppliers at St Petersburg. Regular buyersin the market previously told Platts that Russian suppliers have started tocommunicate with each other to determine where prices are set.

The premium of Novorossiisk MGO over ICE gasoil front-month futuresreached a four-month high Thursday to be assessed at $58.25/mt, its highestvalue since July 7.

St Petersburg MGO is now at a premium to ICE gasoil front-month futuresfor the first time since August 15.

Platts assessed MGO at St Petersburg at a $8.25/mt premium to thefront-month gasoil futures.

--Emma Kettley, emma.kettley@spglobal.com

--Edited by Jonathan Fox, jonathan.fox@spglobal.com