All fuel grades remain in tight supply for prompt delivery dates in Singapore. Dwindling fuel oil cargo inflows and rising exports have contributed to curb availability of VLSFO, although lead times are one day shorter than a week ago, at 8-10 days now, says an article published in ENGINE.
Singapore’s net fuel oil imports fell by a quarter to just 1.18 million bbls in the week to 9 February, and contributed to draw fuel oil inventories down to five-week lows, according to Enterprise Singapore data.
LSMGO stems are more readily available in Singapore with lead times of 6-7 days ahead recommended, while HSFO380 continues to require at least 10 days ahead.
Rallying Brent crude values and ever higher bunker prices have sapped bunker demand. Especially in Zhoushan, where lower post-New Year demand, ample fuel availability and increased competition for stems among Chinese suppliers has put downward pressure on VLSFO and LSMGO prices.
A shortage of cargo flows and cutters for VLSFO blending keeps supporting Singapore and Fujairah’s prices. Their VLSFO premiums over Zhoushan have risen to $12-13/mt. Relatively higher VLSFO values have contributed to stretch their Hi5 spreads to $220/mt, compared to $195/mt in Zhoushan.
Zhoushan’s Hi5 spread is also narrower as its HSFO380 price is relatively higher than in Singapore and Fujairah. HSFO380 supply is slightly tighter in Zhoushan this week.
Rough weather is forecast in Zhoushan on Saturday and Sunday and could disrupt some bunker operations. Expectations of delays could have swayed some buyers to plan around weekend delivery dates, sources say.
VLSFO supply tightened considerably in Hong Kong last month after an alleged off-specification cargo load took expected supplies out of the market, sources said. VLSFO availability has now normalised, along with LSMGO, while HSFO380 continues to be tight with all suppliers.
South Korean ports had scarcer supply of all grades last week, with lead times ranging between 10-12 days in the country’s southern ports of Busan, Ulsan and Yeosu. These lead times have now shorted to 5-8 days.
Low fuel supply and port congestion in Tokyo Bay has reduced availability for remaining dates this month. HSFO380 is particularly tight as not all suppliers are offering, sources say.
Fujairah has seen better prompt availability this week, with recommended lead times for VLSFO and LSMGO coming down to 5-6 days, from last week’s nine days. HSFO380 lead times are down to seven days, from 11 days last week.
Meanwhile, the UAE port’s inventories of heavy distillates and residual fuel oil fell by 4% to a two-week low on 7 February, according to Fujairah Oil Industry Zone and S&P Global Platts data.
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