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ENGINE: East of Suez Fuel Bunker Fuel Availability Outlook

Bunker availability continues to be tight for residual fuels in Singapore, while fuels are available at shorter notice in Zhoushan and Fujairah this week.

Singapore’s fuel oil stocks fell by 8% in the week to 17 February, when they measured 19.38 million bbls, according to Enterprise Singapore data. That was the lowest levels since December of 2019.

The port’s fuel oil stockpiles have been shrinking partly because bunker buyers booked stems ahead of the Lunar New Year holiday, which added pressure on available volumes. Sharply higher fuel oil exports out of Singapore also contributed to the stockdraw.

But while there is considerably less fuel in Singapore’s storage than in previous months, lead times for stems have been steady on the week. Shipowners should book VLSFO stems around 8-9 days ahead now, and plan 12-15 days ahead for HSFO380 stems. Lead times for LSMGO have dropped by one more day this week, to just 3-4 days now.

Singapore has plenty of middle distillates in storage, and stocks increased by 1% in the week to 17 February, when they stood at 15.41 million bbls – the highest levels since December of last year.

Fujairah’s lead times for VLSFO and LSMGO have shortened by another day, to six days now. HSFO380 however continues to be tight in the UAE bunkering hub, with lead times steady on the week at 10 days. Fujairah’s heavy distillate and residual fuel oil stocks have dropped to a multi-month lows, and contribute to keep HSFO380 supply tight.

China’s Zhoushan, however, is seeing better availability this week. The port’s lead times have come down by another day to three days, and certain suppliers can deliver on even shorter notice.

Hong Kong still has strict quarantine rules in place for vessels not handling cargo, which were introduced in July last year. As a result, Hong Kong’s fuel oil imports were sharply down in 2020, dropping by 10% year-on-year. With sluggish bunker demand in the second half of 2020, less fuel oil was needed, and Hong Kong’s fuel oil imports dropped 23% from the first half to the second half of the year. VLSFO and LSMGO are readily available in the port, while HSFO380 continues to be tight.

Bunker supply tightened in South Korea’s southern bunker hub, Busan, this week. The earliest delivery date in the port is now around four days ahead. Supply is also tighter in South Korea’s western ports, which require six days ahead.

VLSFO and LSMGO supply remains tight in Japan. Japan’s fuel oil stocks dropped by 2% in the week to 11.35 million bbls, data from Petroleum Association of Japan showed on 13 February. But while there is less fuel oil in storage in Japan, it is busy barge schedules rather than insufficient supply volumes that has tightened its bunker market.

Fuels continue to be tight in Far East Russian ports, as refinery delays coupled with last week’s rough weather in the region have led to continuously tight supply. Sources expect the tightness to start easing from 5 March onwards.
Source: ENGINE (https://engine.online/)

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