24-09-2016

Singapore Q4 ex-wharf 380 CST bunker fuel term inked at around $2.50/mt premium

bunker

Singapore ex-wharf 380 CST bunker fuel term contracts for the fourth quarter of 2016 have mostly been concluded at premiums of $2.25-$2.50/mt to Mean of Platts Singapore 380 CST high sulfur fuel oil assessments, trade sources said this week.

This compares with current quarter term contracts concluded at discounts of $0.25-$0.50/mt to MOPS 380 CST HSFO assessments.

“Generally offers have been [at premiums of] around $3/mt, while most part of the volume termed out have been [at premiums of] around $2.50/mt,” said a trader.

“Yes, $3/mt [premium] is what I heard is being offered currently; I did hear $2.50/mt [premium] trade, but I guess some have concluded at closer to [premiums of] $3/mt levels too,” said another trader.

Spot ex-wharf 380 CST bunker differentials to MOPS 380 CST high sulfur fuel oil have been firming up, tracking a strengthening 380 CST fuel oil cargo market since early June.

Singapore fuel oil market has garnered support on lower-than-average monthly western arbitrage fuel oil arrivals into Singapore in the third quarter as compared to average monthly volumes in the first half of the year.

The mainstay Singapore 380 CST HSFO cash differentials have firmed up from a three-month low of minus $4.38/mt on June 3 to a five-month high of $1.31/mt August 31, S&P Global Platts data showed.

The spot daily ex-wharf 380 CST bunker differential to MOPS 380 CST HSFO inched up from a discount of $1.87/mt to a premium of $3/mt during the same period, Platts data showed.

With just one week of trading left to close the current quarter, the spot daily ex-wharf 380 CST bunker differential to MOPS 380 CST HSFO has averaged at a premium of $1.76/mt, compared with a premium of just 4 cents/mt in the previous quarter, data showed.

Premiums or discounts for physical bunker fuel reflect prices buyers are willing to pay relative to published benchmark values. Cash differentials for physical fuel oil represent the price buyers are willing to pay for the oil over and above benchmark values published around the day a cargo loads.

Source: Platts 

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