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NWE HSFO barges at 4-year low on weak crude; bunkers activity picks up

Northwest European high sulfur fuel oil barge values dropped to a four-year low Tuesday, tracking the fall in crude prices, while a concomitant fall in bunker fuel prices sparked increased activity in that market, according to sources.

Northwest European high sulfur fuel oil barge values dropped to a four-year low Tuesday, tracking the fall in crude prices, while a concomitant fall in bunker fuel prices sparked increased activity in that market, according to sources.

The outright price for physical 3.5% FOB Rotterdam barges was assessed at $429/mt Tuesday -- a $17/mt drop from the previous day -- and was last assessed lower on September 23, 2010 when it was $423/mt.

HSFO prices were tracking the sharp fall in crude prices. Dated Brent hit $82.30/barrel Tuesday, shedding $2.54 day-on-day and recording the lowest price since November 23, 2010.

Crude prices fell after the EU cut its 2014-2015 growth forecasts for the eurozone Tuesday, raising concerns over falling global oil demand. In a similar vein, delivered Rotterdam high sulfur bunker fuel spot prices fell to around four-year lows Tuesday, assessed at $437/mt Tuesday, tracking the general weakness of the crude and fuel oil complex.

Bunker fuel traders said that falling bunker prices attracted strong buying interest in the majority of the European ports Tuesday.

"Demand is very busy today," one trader in Rotterdam said.

While fuel oil prices have softened in line with the crude complex, bunker fuel premiums over ex-wharf 3.5% Rotterdam barges have risen, triggering strong selling interest, traders said.

"Premiums are healthy for suppliers, they are keen to sell into the bunker pool," another source said.

According to Platts data, 380 CST HSFO premiums Rotterdam basis have been steadily rising, reaching $8.50/mt over the 3.5% sulfur barge market Tuesday.

--Maude Desmarescaux, maude.desmarescaux@platts.com --Jelena Grigorjeva, jelena.grigorjeva@platts.com --Edited by Alisdair Bowles, alisdair.bowles@platts.com

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