- Stocks of heavy distillates and residues at Fujairah fell 11% to 10.34 million barrels due to tight supply.
- The outflow for Persian Gulf high sulfur fuel oil cargoes to Singapore is steady owing to a strongly backwardated Singapore market.
- The Singapore 380 CST HSFO cash differential hit a record high of $61.92/mt on September 17.
According to an article published in Platts, stocks of heavy distillates and residues at Fujairah fell 11% on the week.
Oil prices continue to fall
Market sources say that the fall comes as fuel oil cargoes continue to find an outlet in Singapore, which has been seeing tight supply.
Heavy distillates and residues at Fujairah fell 11% to 10.34 million barrels in the week to Monday, according to Fujairah Oil Industry Zone data released late Wednesday.
Outflow to Singapore steady
The outflow for Persian Gulf high sulfur fuel oil cargoes to Singapore is steady as traders were not keen to ship cargoes from elsewhere, owing to a strongly backwardated Singapore market, sources said.
“Fujairah is [still] shipping a lot of [HSFO] barrels [to the] East,“ a Dubai-based trader said.
Record high cash differentials in the Singapore 380 CST HSFO market has also made it an attractive outlet for HSFO cargoes. The Singapore 380 CST HSFO cash differential hit a record high of $61.92/mt on September 17, S&P Global Platts data showed. The differential was assessed at $56.22/mt on Wednesday.
World’s largest ship refueling place
HSFO has traditionally found its way from the Persian Gulf to Singapore, the world’s largest ship refueling destination.
Stable bunker demand in Fujairah has also led to lower stocks on the week, sources added.
“[Demand is] not too bad … there was an immediate reaction to the Saudi incident [initially] but seems roughly normal again now,“ a Fujairah bunker supplier said.
A wide discount to Singapore bunker prices continued to make Fujairah an attractive bunkering port.
The Fujairah/Singapore delivered 380 CST bunker price spread averaged minus $41/mt in September so far, widening from an average of minus $19/mt in August, Platts data showed.
Fujairah expects to see more demand
On the other hand, the Fujairah bunker market is expected to see more demand for 0.5% sulfur bunker from the fourth quarter.
LSFO cargoes were loaded in Singapore mid-September, heading to Fujairah to meet the demand there. Local production cannot meet all the demand for low sulfur bunker fuel oil in October, while Fujairah has about 600,000 mt/month of bunker demand, according to the sources.
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Source: Platts
