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Singapore delivered/ex-wharf 380 CST bunker spread narrows on weak demand

The spread between Singapore delivered and ex-wharf 380 CST bunker fuel prices has narrowed further this week due to lackluster demand in the delivered market, trade sources said.

The spread has averaged $5.45/mt in February to date, narrowing from $7.11/mt over January, S&P Global Platts data showed. The spread narrowed a further 25 cents/mt day on day to $3.75/mt at the Asian close Tuesday, Platts data showed.

Poor buying interest has exerted downward pressure on delivered 380 CST bunker fuel premiums in recent days, and competitive offers were emerging in an effort to encourage uptake, market sources said.

Delivered bunker fuel premiums over Mean of Platts Singapore 380 CST high sulfur fuel oil assessments hit an eight-month low of $5.56/mt at the Asian close Tuesday. The premium was last lower at $5.07/mt on June 6 last year, Platts data showed.

Traders typically have to sell delivered bunker fuel at least $5/mt above ex-wharf bunker fuel prices to break even.

“It is awfully quiet today,” a delivered bunker fuel supplier said late Tuesday, adding that some sellers were lowering offers to close to ex-wharf levels.

The spread had earlier widened in January from December due to temporary tightness in barge availability for prompt deliveries. That tightness has eased for the moment, market sources said.

Ex-wharf premiums have also softened in recent days amid a weaker fuel oil complex as the market underwent selling pressure amid expectations of heavy cargo arrivals and slow uptake in March.

“Some sellers are clearing cargoes to make way for March arrivals,” a bunker trader said.

Singapore is likely to receive more than 4 million mt of fuel oil from Europe and the Americas in March, traders said, up from 3.5 million-4 million mt expected in February.
Source: Platts

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