Spot premiums for fuel oil were largely stable on Monday, while the market eyed improving supply into second half of the month.
Singapore’s cash differential for very low sulphur fuel oil (VLSFO) held near a premium of $20 a metric ton to cargo quotes, while delivered bunker premiums were in the $25 to $30 range, according to trade sources.
Market activity in the derivatives market was also largely quiet on Monday amid a Chinese holiday, said traders. Front-month October cracks closed stable from last week at premiums of about $11.20 a barrel, based on LSEG’s data.
The VLSFO market had started to show signs of easing since last week, with benchmarks logging week-on-week declines. The market was eyeing improving supply following a period of tightness in finished products and blendstocks.
High sulphur fuel oil (HSFO) markets were also little changed on Monday amid thin activity.
The Hi-5 spread FO05-380SGMc1, which is the price premium of VLSFO over 380-cst HSFO, has narrowed to levels near $130 a ton in recent sessions, after widening to a six-month high of more-than-$180 a ton in early September.
SINGAPORE BUNKER SALES
August bunker sales at Singapore totalled 4.56 million metric tons, posting a 2.3% monthly decline, though logging a 7.2% uptick from a year-earlier period, data from the Maritime and Port Authority of Singapore (MPA) showed.
Volumes for conventional bunker fuels softened for key grades month-on-month, as some spot demand got diverted to other Asia ports following a spike in Singapore bunker premiums and cargo tightness in late August, market sources said.
However, marine biofuel sales reached a monthly record high. Spot premiums of the delivered B24 marine biofuel grade narrowed to less than $110 per metric ton above 0.5% LSFO cargo prices in August, which could have spurred some uptake, said sources.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Janane Venkatraman)
