Home / Shipping News / International Shipping News / Lackluster Singapore bunker fuel demand forces re-supply vessels to float on tight ullage

Lackluster Singapore bunker fuel demand forces re-supply vessels to float on tight ullage

Lackluster end-user demand for the mainstay 380 CST bunker fuel has left vessels carrying replenishment cargoes to continue to float off Singapore due to tight ullage at storage tanks on landed terminals, traders said.

A relatively thin bunker demand in Singapore so far this year has led to an increase in inventories in landed storage tanks, industry sources said.

At least three vessels are floating, waiting to discharge, a trader said. However, further details were not available.

Singapore’s weekly commercial stockpiles of heavy distillates, which include cracked and straight run fuel oil and low sulfur waxy residue, has averaged 20.25 million barrels so far this year, up 11.14% from 18.22 million barrels in the previous October-December 2018 quarter, data from Enterprise Singapore showed.

“January Singapore bunker demand is down about 10%, February demand I think will be down another 10%-20% … supply is too much,” a fuel oil trader at a western trading company said Friday.

“You can see from the number of ships waiting to discharge … many are waiting for ullage,” he said. “My VLCC [is] still waiting outside the terminal since end-February … just 150,000 mt, but cannot discharge,” he said referring to the lack of ullage in one of the Singapore terminals.

Bunker uptake has been tepid since February especially for the spot market, according to market sources.

“February is usually a seasonally slow period, but this year it’s quiet even though no one knows why,” a bunker supplier said.

Overall lackluster demand resulted in lower bunker premiums compared with the last quarter of 2019, Platts data showed. The ex-wharf 380 CST bunker fuel premium over Mean of Platts Singapore high sulfur fuel oil 380 CST averaged $5/mt to-date in Q1 2019, plunging by more than 50% compared with $11/mt over Q4 2018. The delivered 380 CST bunker fuel premium over MOPS HSFO 380 CST averaged $11/mt in Q1 2019 to date, compared with $16/mt in Q4 2018, the data showed.

“[Delivered/Ex-wharf] Spread is narrower these days as some sellers are trying to turn barges by selling delivered [bunkers] at more competitive prices, it’s better than leaving the barge there idling,” a bunker trader said.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping