New York — The expectations of fewer August arbitrage cargoes in Singapore as well as supply cuts have led to a slight uptick in Asian low sulfur fuel oil margins, with trading sentiment more bullish from the week prior.
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Marine fuel 0.5% sulfur
** The Singapore Marine Fuel 0.5%S market has maintained momentum after the cash differential flipped into premium July 21. "Lesser inflow of arbitrage cargoes in August from West and a relevant stock level drop in Greater Singapore will be the reasons," said a Singapore-based fuel oil trader.
** The Marine Fuel 0.5%S cash differential rose to 66 cents/mt on July 23, before it slipped to 45 cents/mt on July 24, S&P Global Platts data showed.
** Inquiries for low sulfur bunker fuel increased slightly in the week ended July 25 with most inquiries for prompt dates. Most traders said they did not have barge avails prior to August 1 as most buyers had already booked cargo for those dates in recent weeks. They added that overall demand for low sulfur bunker fuel remains unchanged from June and that any recovery in demand will be slow as oversupply continues to weigh on market sentiment.
** The Singapore-delivered Marine Fuel 0.5%S bunker premium to Singapore Marine Fuel 0.5% cargo increased to $19.55/mt July 24 from $18.50/mt July 17.
** In the Northeast Asian bunker market, with an increasing number of refineries in China starting up LSFO production, LSFO prices are expected to gradually level across Chinese ports. Independent suppliers will be able to obtain fuel supply from domestic refineries located near different ports, instead of having to bring in a large cargo into one port and transfer the fuel via barges to neighboring ports, market sources said.
High sulfur fuel oil
** Traders estimate July bunker demand figures from Singapore's Maritime and Port Authority to show an improvement over June demand, fuelling continued bullish sentiment even as the Middle East continues to import 380 CST HSFO volumes to meet it's summer power demand.
** In the Singapore downstream bunker market, the tight supply situation from the prior week is easing, according to bunker traders in the region, with most buyers having procured sufficient inventories, although spot demand remains strong.
** Reflecting the demand, the Singapore-delivered 380 CST bunker premium to Singapore 380 CST HSFO cargo assessments increased to $25.09/mt on July 24 from $23.91/mt on July 17.
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