Jan 10, 2022
In the week of Jan. 10-14, bunker fuel suppliers expect downstream ex-wharf and delivered bunker fuel premiums to soften, however, there are concerns that supply in Singapore could tighten towards the end of the month amid a delay in the arrival of blend components.
In Japan, availability of high sulfur fuel oil bunker remains tight as utility companies’ HSFO demand stays high on strong heating demand, suppliers there said.
At 0300 GMT Jan. 10, March ICE Brent futures contract were trading at $82.01/b, down slightly from the 0430 GMT Jan. 7 close at $82.27/b, Intercontinental Exchange data showed.
** Singapore Marine Fuel 0.5%S January-February spread rose to $13.50/mt Jan. 10, according to broker indications, from the Jan. 7 assessment of $12/mt. According to ICE data, the spread was bid at $9.75/mt against an offer at $15.50/mt.
** The rally in Singapore-delivered marine fuel 0.5%S spot premiums has begun to falter as the market expects bunker premiums to inch lower in the ensuing weeks amid emerging signs of rising low sulfur fuel oil stockpiles, bunker suppliers said.
** Cargo supply remains uncertain with at least one early-February arrival very low sulfur fuel oil blending component cargo from Africa delayed.
** The downstream market expects spot Singapore ex-wharf marine fuel 0.5%S premiums to soften amid increased availability for prompt loading; shortening waiting time for ex-wharf buyers to refuel bunker barges.
** LSFO barge availability at Fujairah is likely to remain tight with limited slots for prompt deliveries until mid-January as bunker suppliers fulfill backlog orders, while the market recovers from rough weather that disrupted bunkering and cargo operations since the start of 2022 through Jan. 5, market sources said.
** FOB Singapore 380 CST HSFO February-March swap was stable Jan. 10 at minus 25 cents/mt, unchanged from the Jan. 7 Asian close, ICE data showed.
** HSFO bunker suppliers are facing downstream supply shortage amid operational bottlenecks despite ample stockpiles, traders said, pushing Fujairah ex-wharf 380 CST HSFO premiums for January term supply above that of December at $5-$10/mt to the FOB Arab Gulf 180 CST HSFO cargo assessments.
** Rising competition in the Singapore-delivered 380 CST HSFO market is expected to intensify as some bunker suppliers replenished inventories to resume offers during the trading week ended Jan. 7, market sources said.
** Spot demand for delivered Singapore 380 CST HSFO is likely to slow in H2 January and weigh on premiums, while freight activity is expected to slow ahead of the upcoming Lunar New Year holidays.
** Japan’s high sulfur bunker availability is expected to remain tight as demand from power utilities is still strong. Japanese refiners will not offer spot fuel to bunker traders if they do not have term contracts in an effort to ensure there is sufficient fuel for power companies.