Low sulfur fuel oil supply in Singapore is expected to remain tight in the week of March 28-April 1 as the inflow of western arbitrage cargoes in April will likely be lower than in March.
Market sources said cutter stocks with a 0.2%-0.3% sulfur content is in short supply as gasoil strength has attracted the cutter stock to the middle distillate market.
Meanwhile, the 180 CST high sulfur fuel oil market is expected to remain strong due to limited cutter stocks and emerging South Asian demand.
Crude oil futures opened higher in Asia March 28, with May ICE Brent trading at $117.86/b at 0300 GMT, up from $116.34/b at the 0830 GMT Asian close on March 25, says an article published in Platts.
Marine fuel 0.5%S
S&P Global Commodity Insights data showed that the cash differential to the Mean of Platts Singapore Marine Fuel 0.5%S assessment weakened slightly to $21.70/mt March 25 as Indonesia had sold April-loading cutter stocks.
Singapore Marine Fuel 0.5%S April-May swap spread was holding firm March 28, rising from $29.30/mt at the Asian close on March 15, to be pegged at $30.25/mt, according to brokers.
Suppliers are likely to cap Singapore-delivered marine fuel 0.5%S bunker premiums in March, and offer more competitively in a bid to drawdown inventories and reduce volumes to be rolled forward, traders said.
LSFO bunker demand is expected to stay below average, or moderate at best, at both Singapore and Fujairah as buyers sought to defer and minimize requirements amid soaring crude oil prices, market sources said.
Despite limited stockpiles at Fujairah, sellers are expected to offer prompt delivered LSFO bunkers amid healthy barge availability, local bunker suppliers said.
Zhoushan-delivered marine fuel 0.5%S bunker premiums are expected to stay firm this week, as suppliers curb appetites for ex-wharf parcels owing to strong premiums and fluctuating crude oil markers that pose a credit risk, bunker suppliers said.
Traders in Japan expect supply of low sulfur fuel oil bunkers to resume around mid-April onwards as cargo loadings remain suspended due to unresolved glitches at both ENEOS and Idemitsu refineries.
High sulfur fuel oil
HSFO supply in Singapore is expected to tighten due to ongoing demand from South Asia. Pakistan and Sri Lanka bought April-delivery 180 CST HSFO via tenders, while Bangladesh is also buying actively, fuel oil traders said.
Trading activity for April term Singapore ex-wharf 380 CST HSFO is likely to stay subdued as quality issues led market participants to stay on the sidelines, while inventories are sufficiently ample to meet downstream requirements for the rest of March, market sources said.
HSFO barge availability at Fujairah has steadily tightened since the week ended March 25, while suppliers are expected to stretch bunker delivery lead times owing to limited prompt slots, traders said.
Traders anticipate the Fujairah-delivered 380 CST HSFO bunker premiums to stay buoyed despite plentiful inventories, as some suppliers were heard struggling to cope with above-average volume of inquiries.
Hong Kong’s HSFO inventories are expected to stay ample through mid-April amid choppy spot bunker demand, despite a relatively stable stream of term contractual HSFO bunker nominations, according to local suppliers.
HSFO bunker supplies in South Korea is likely to remain tight through mid-April as local refineries undergo scheduled maintenance during the spring season, according to traders.
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Source: Platts
