Tight supply for November deliveries pushed the spread between South Korean delivered 380 CST bunker fuel and Mean of Platts Singapore 380 CST high sulfur fuel oil assessments to a 10-year high at $74.46/mt Monday, S&P Global Platts data showed.
It was last higher at $84.27/mt on November 5, 2008.
Market sources attributed the tightness to suppliers having sold most of their availabilities earlier in the month.
“It is tight for November as only two suppliers [are able to] offer for November delivery,” a supplier said Monday.
Supply for November has been tight as S-Oil had exported high sulfur fuel oil cargoes during the month and had limited availability left for the bunker market.
“The whole month average for November is $30-40/mt higher than December,” a trader said.
South Korean refiners typically quote a premium over the whole month average for bunker fuel supply.
“We are still seeing inquiries for November delivery, which is exceeding December delivery requirements as of now. There is a heavy backwardation from November to December,” the trader said Tuesday.
Market watchers expect supply in December to be tight as well.
“The backwardation should continue in December; the market is too tight due to a shortage of HSFO and bunker fuel in the region,” another supplier said.
Source: PlattsPrevious Next
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