The price of VLSFO has dipped below the price of HFO for the first time this week as the volatility of crude oil prices has begun to knock the coronavirus news off the news agenda.
The price of West Texas Intermediate (WTI) ventured into negative territory on 20 April as traders, concerned about the possibility of having nowhere to store the increasing inventory of stranded oil, started to offload oil before having to take delivery of the commodity. At the time of writing, WTI has gained US$32.40/bbl remains at -US$5.18/bbl.
Brent Crude has fared only a little better, having lost nearly 20% of its overnight value during the day on 21 April. At the time of writing Brent Crude was trading at US$20.65/bbl.
The MABUX index shows that VLSFO in both the Southern European and Central American regions have fallen below the cost of HFO. In Sothern Europe, which includes Gibraltar, the cost of VSFLO has dropped to US$229.50/tonne, compared to US$234/tonne for HFO. In Central America VLSFO was US$6/tonne below the price of HFO at US$287.50/tonne.
On the average global scale, however, HFO remained US$42/tonne below the cost of VLSFO. In North America the spread between the two fuels remains stubbornly high at US$84/tonne.