Singapore-delivered marine fuel 0.5%S bunker premium against benchmark Singapore Marine Fuel 0.5%S cargo assessments rose to a multi-month high of $30.28/mt Dec. 23, Platts data showed, on the back of limited availability of low sulfur fuel oil cargoes, says a Platts Market Insight.
This premium was last higher at $36.08/mt on April 30, 2020.
Ex-wharf buyers
Bunker suppliers are experiencing congestion for loading term parcels as upstream cargo suppliers reserve limited stockpiles of the International Maritime Organization-compliant product for their own barges, in the process delaying barge refueling schedules for downstream ex-wharf buyers, market sources said.
“Bunker suppliers are experiencing loading congestions because ex-wharf sellers would naturally prioritize the refueling for their own barges. Barge availability has tightened, longer duration is spent queuing for berth to load oil,” a Singapore-based bunker supplier said.
Ex-wharf cargoes
On Dec. 23, there were inquiries for large parcels of the fuel for delivery in the first week of January, traders said. This is in addition to “last minute” prompt requirements, in anticipation of the continued rise in crude oil prices through the Christmas weekend, traders said.
“There is growing uncertainty over barge refueling schedules due to the low inventories here. While buyers can purchase ex-wharf cargoes at high premiums, securing a berth in time is another concern,” a second bunker supplier said.
The tightness in supply of low sulfur fuel oil is expected to persist through January, especially during the first half of the month, as fresh arbitrage cargoes from the West are estimated to arrive in H2 January, traders said.
“The rising cost of ex-wharf has led most buyers to stay on the sidelines in December. However, the demand for ex-wharf [low sulfur fuel oil] is likely to firm up next month amid expectations of stronger bunker demand as freight traffic rebounds,” a Singapore-based trader said.
Prior to the year-end festivities, shipping activity has been subdued in December, slowing the pace of bunker demand in Singapore, sources said.
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Source: Platts
