- Fujairah-delivered 380 CST bunker premiums over the Mean of Platts Arab Gulf 180 CST HSFO assessments averaged $21/mt so far in August.
- Singapore-delivered 380 CST bunker premiums over the Mean of Platts Singapore 380 CST HSFO assessments struck a fresh historical high of $59.52/mt.
- Supply dynamics remain volatile as marine fuel markets transit into a low-sulfur bunkering landscape ahead of IMO 2020.
According to an article published in Platts, bunker fuel demand has strengthened at the Middle Eastern bunkering hub of Fujairah as delivered bunker prices at Singapore have soared above that of Fujairah.
New record widens
This movement is forcing the price gap between these two ports to widen to a new record.
S&P Global Platts assessed the Fujairah/Singapore delivered 380 CST bunker fuel spread at minus $53.65/mt at Wednesday’s Asian close, the widest on record. Platts had assessed the delivered grade in Fujairah at $386.35/mt, up to $14.85/mt from Tuesday, while the same delivered grade was assessed at $440/mt in Singapore, up to $35/mt day on day.
“Demand is good at Fujairah currently despite regional tensions, so I believe there has been some buying interest diverted,“ a Fujairah bunker supplier said with respect to the difference in the price of the same delivered grade at the two ports.
Tankers to alternate between Singapore and Fujairah
Depending on the bunker fuel price, tanker owners may alternate between Singapore and Fujairah to re-fuel, after taking into consideration the ship’s planned route.
“This month is a record month for us volume-wise, and we are seeing good enquiries that want to be fixed. [The price is] one of the reasons for sure. However, if you compare it with the penalty of the insurance then I’m not sure if it’s cheaper to just lift bunkers here,“ a Fujairah bunker trader said.
Tensions in the Middle-east
A series of tanker attacks near the Strait of Hormuz in June raised tensions in the Middle East and deterred some shippers from refueling in Fujairah.
Nevertheless, some bunker fuel demand has since returned to Fujairah, though war insurance premiums may still keep some away, industry sources said.
“The [price] delta has increased between the two locations, while it has not made a substantial demand tilt towards Fujairah, the demand [in August] has comparatively increased compared with last [previous] two months,“ another bunker supplier said.
Higher Fujairah bunker premiums
Fujairah bunker premiums have been trending higher in the last couple of months mainly on the back of incremental demand.
Fujairah-delivered 380 CST bunker premiums over the Mean of Platts Arab Gulf 180 CST HSFO assessments averaged $21/mt so far in August, up from an average of $9/mt in July, Platts data showed.
The extent of the uptrend, however, is less than that of Singapore, whose premiums have soared to fresh highs in light of extremely strong fundamentals. Bunker premiums at Singapore have trended significantly higher this week on the back of tight supply and barging schedules, market sources said this week.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Platts
