25-08-2018

Fujairah 380 CST bunker premium hits 27-month high on tight barge supply

The premium for Fujairah-delivered 380 CST bunker fuel hit a 27-month high amid tight barge supply for prompt deliveries, following brisk activity in recent weeks.

The premium for Fujairah-delivered 380 CST bunker fuel to the Mean of Platts Arab Gulf 180 CST high sulfur fuel oil assessments rose by $1.73/mt day on day to $22.27/mt Thursday. It was last assessed higher on May 27, 2016, at $23.28/mt, S&P Global Platts data showed.

Most sellers were unable to commit to spot inquiries for prompt delivery dates due to a lack of barges, trade sources said late Thursday.

“Many suppliers are booked for prompt dates and most could only do [deliveries] from end August or early September onwards,” a Fujairah bunker trader said.

“Demand has also been good for the past couple of weeks, hence sellers were already occupied with their own fixtures,” the trader added.

While trading activity was quieter this week due to the Eid al-Adha holidays, Fujairah bunker demand has been rising steadily since the end of July as prices were competitive when compared with Singapore, sources said.

Recent concerns over off-spec bunker fuel in Singapore could also have led to some shift in demand to Fujairah, sources added.

Meanwhile, tighter cargo availability in recent days also supported premiums.

“It’s now tight on both barges and cargoes, the most prompt that I can do is six days forward,” a trader said.

Stocks of heavy distillates and residues in Fujairah had fallen by 3.8% to 8.939 million barrels in the week to Monday, the lowest level since the end of June, data from the Fujairah Energy Data Committee showed.

Source: Platts

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