The Weekly Outook was contributed by Marine Bunker Exchange (MABUX)
Global oil and fuel prices are picking up as demand returns to pre-pandemic levels amid easing coronavirus lockdowns in key countries like China and India and signs of increasing road travel in several countries.
MABUX World Bunker Index has shown firm uptrend during the week. The 380 HSFO index has risen from 386.92 USD/MT to 406.40 USD/ MT (+19.48 USD), VLSFO has added 10.12 USD: from 499.64 USD/MT to 509.76 USD/MT while MGO has gained 18.60 USD and has risen from 549.21 USD/MT up to 567.81 USD/MT. The Global Scrubber Spread (SS) – the difference in price between 380 HSFO and VLSFO – has not changed during the week and averaged 105.87 USD.
SS Spread in Rotterdam has widened during the week from 108.00 USD up to 111.00 USD (+3.00 USD). Average value of SS spread for the week has risen by 10.16 USD from 98.67 USD last week to 108.83 USD. In Singapore SS Spread has also risen during the week by 5.00 USD: from 141.00 USD to 146.00 USD. Average weekly SS Spread in Singapore has gained 22.84 USD: from 120.33 USD last week up to 143.17 USD. Price differentials between 380 HSFO and VLSFO continue widening. 
Correlation between MBP Index (Market Bunker Prices) vs DBP Index (MABUX Digital Benchmark) in four global largest hubs during the past week showed that 380 HSFO and MGO LS fuel grades remain moderately undercharged in all selected ports. According to DBP Index, the underestimation of the 380 HSFO increased slightly from last week, ranging from minus $ 13 (minus $ 8 last week) in Fujairah to minus $ 16 (minus $ 10) in Houston and minus $ 19 (minus $ 8 last week) in Rotterdam. MGO LS was also undervalued, ranging from minus $ 5 (minus $ 3 last week) in Houston to minus $ 29 (minus $ 30) in Singapore). The only fuel that, according to DBP Index, remains overvalued in all selected ports, is VLSFO. The range of overcharging has not changed significantly: from plus $ 5 (plus $ 7) in Houston to plus $ 14 (plus $ 16) in Singapore.
As per Veritas Petroleum services (VPS), very low sulphur fuel oil (VLSFO) has become the dominant fuel grade over the course of 2020, accounting for 66% of fuel samples tested by VPS. An average of 8% of fuels were-off spec across last year, indicating that bunker fuel quality has been steadily deteriorating. The geographical distribution of off-spec fuels was not even, with Europe and America on the high side, Asia on the low side and Africa in the mid-range. It was also highlighted the continuing quality challenges posed by VLSFOs in relation to issues such as high Total Sediment Potential (TSP) and cold flow properties.