South Korea 380 CST bunker hits 4-year high on Saudi oil facility attacks
Delivered 380 CST bunker fuel in South Korea hit a four-year high of $575/mt at the Asian close Monday following attacks on Saudi Arabia’s key oil infrastructure on Saturday.
The attacks on Saudi’s Abqaiq processing facility and Khurais oil field affected 5% of global oil supply and reduced output by 5.7 million b/d, propelling international crude markers by as much as 20% higher early Monday.
This had driven delivered South Korea 380 CST bunker fuel assessments $25/mt or 4.55% higher compared with last Friday September 13 assessments.
The surge in outright values had also caused the South Korea delivered 380 CST bunker premium over the Mean of Platts Singapore 380 CST high sulfur fuel oil cargo assessments to narrow $1.61/mt day on day to $129.22/mt on Monday, Platts data showed.
TIGHT HIGH SULFUR BUNKER SUPPLY IN S KOREA
Prior to Saturday’s attacks, South Korea’s high sulfur bunker fuel supply had been tightening for the past few months, as the country’s refiners reduce HSFO output and imports in order to prepare for the production of 0.5% sulfur marine fuel, market sources said.
The limited supply of the bunker grade had driven the premium to a high of $161.22/mt on September 6, 2019.
The decline in high sulfur bunker fuel output in South Korea comes ahead of changes to the International Maritime Organization’s regulation in January 2020, which will cap global sulfur content in marine fuels at 0.5%, down from the current 3.5%.
Nevertheless, bunker premiums at the Northeast Asian port is expected to continue to ease with additional HSFO imports arriving later this month from Singapore, market sources said.
“There has been new replenishment and one of the refiners has been selling more bunker fuel in the spot market,” a South Korean trader said.