Sentiment in the Asian marine fuel 0.5%S market has perked up for the Nov. 1-5 trading week on the back of the rise in bunker premiums as demand recovers.
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Register NowSimilarly in the Middle East, strong demand and low inventories has boosted market sentiment in Fujairah for very low sulfur and high sulfur bunker fuel, according to suppliers based there.
At 0200 GMT Nov. 1, the January ICE Brent futures contract was trading at $83.81/b, up from $83.84/b at the 0830 GMT Asian close Oct. 29.
Marine Fuel 0.5%
** Singapore Marine Fuel 0.5%S November-December spread Nov. 1 was stable from the Oct. 29 assessment of $4.60/mt, with the spread bid at $4/mt against no offers, according to data from the Intercontinental Exchange.
** Congestion at terminals along the Singapore Straits has limited barge capacities for prompt deliveries amid above-average bunker demand, hence propping up premiums for Singapore-delivered marine fuel 0.5%S, traders said.
** Singapore-delivered marine fuel 0.5%S premium over FOB Singapore Marine Fuel 0.5%S gained 86 cents/mt on the week to average $10.98/mt during the week ended Oct. 29.
** Singapore marine fuel 0.5%S is expected to remain firm as demand from North Asia is growing due to high LNG prices.
** In North Asia, bunker supply in Japan is expected to be tight in November as shipowners are looking to buy bunker fuel for two voyages ahead of the New Year holiday.
** Current high freight rates are encouraging shipping companies to maximize the utilization of ships so as to avoid having to deviate from planned routes for bunkering. This is also increasing bunker demand in Japan,traders said.
** Ships usually minimize bunker fuel loading in Japan, as Japan's bunker prices are typically one of the highest in Asia.
** On the other hand, high freight is reducing demand at ports for bunker-only calls, such as Zhoushan and Hong Kong, market sources said.
** Other than Zhoushan, Chinese ports are seeing bunker prices rise as refiners reduce low sulfur fuel oil production, market sources said. Refiners are producing more gasoil and cutting LSFO production due to higher gasoil margins.
High sulfur fuel oil
** Singapore 380 CST high sulfur fuel oil November-December spread widened Nov. 1 to $1.25/mt with a trade at that level, up from the Oct. 29 assessment of 75 cents/mt, according to Intercontinental Exchange data.
** Premiums for delivered and ex-wharf 380 CST HSFO bunkers in Singapore have begun to slip as traders expected replenishment cargoes to boost inventories from H2 October to November.
** Robust demand for Fujairah-delivered marine fuel 0.5%S and 380 CST HSFO tightened barge availability for delivery of both grades, while prompt delivery of low sulfur bunker fuel commands steep premiums, market sources said.
** The strong demand for Fujairah-delivered 380 CST also strained inventories, industry sources said, which according to Platts data has pushed premiums of the delivered grade over the Mean of Platts Arab Gulf 380 CST HSFO cargo assessments to a near 19-month high of $51.69/mt on Oct. 29.
** In North Asia, Japan's high sulfur bunker is also likely to tighten ahead of winter, bunker traders said.
** High LNG prices are driving power companies to raise fuel oil consumption, sources added.
** Hong Kong high sulfur bunker fuel is no longer tight, as a result of weak demand, a bunker trader saie.
** A shipment comprising 995,287 barrels, or 156,738 mt, of HSFO sold by Kuwait Petroleum Corporation loaded on Oct. 28 and is destined to arrive in Singapore on Nov. 11, according to data by Kpler.
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Asia residual fuels: Key market indicators for Nov 1-5 - S&P Global
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