24-01-2017

Singapore Feb ex-wharf 380 CST bunker fuel term contract concluded at plus $3.50-$4/mt

bunkerfu

Singapore ex-wharf 380 CST bunker fuel term contracts for February were concluded at a premium of $3.50-$4/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments, trade sources said Monday.

This compares with premiums of $5/mt to the MOPS 380 CST HSFO assessments for January term supply contracts of the same grade of bunker fuel.

Most of the term contracts for February were done at premiums of $3.50-$4/mt, though some were heard inked at plus $4.50/mt to $5/mt, but these were concluded earlier in January.

“February is a short and tough month, and tankers are coming in with some 5 million mt of fuel oil, so there is some pressure on February premiums,” a trader said.

“Timespreads are coming off and the market will be quieter in February with the Lunar New Year,” another trader said. “But the wide range [of February term premiums] also shows how mixed the market is,” he added. The average daily cash differential for 380 CST HSFO slipped from a premium of $2.66/mt in December to $2.29/mt in the first 20 days of January, amid ample supply and lackluster buying demand.

The front-month timespread on the 380 CST in January to date has averaged at $2.11/mt, compared with the December average of $2.36/mt, S&P Global Platts data showed.

Meanwhile, the 380 CST ex-wharf bunker fuel spot differential against MOPS 380 CST HSFO has averaged at a premium of $4.73/mt for the first 20 days of January, up from an average premium of $4.44/mt for December, Platts data showed.

Premiums or discounts for physical bunker fuel reflect the prices buyers are willing to pay relative to the published benchmark values.

Cash differentials for physical fuel oil represent the price buyers are willing to pay for oil, over and above the benchmark values published around the day a cargo loads. Falling physical differentials indicate a slowing appetite from buyers and are typically accompanied by a weakening in the structure of the forward curve.

Source: Platts 

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