Volatility in fuel oil prices and weak crude oil prices, are weighing on market participants’ near-term confidence in Singapore’s bunker fuels market. Despite the uncertain outlook, ex-wharf premiums remain steady, trading at a premium of around $4 to $6 a tonne to Singapore quotes, as some suppliers face a shortage of the fuel since it had accumulated in the hands of a few providers over the past months.
“There is not much confidence in the (bunker fuel) market at the moment,” said a Singapore-based fuel oil trader. Fuel oil prices have flip-flopped over the previous week, creating uncertainty among traders about the future direction of prices. Smaller players have been sidelined amid this uncertainty, the trader said. Crude oil has also trended lower, also weighing on sentiment. “Crude is likely to stay below $50 a barrel until the middle of next week,” the trader said. Two bunker fuel traders pegged ex-wharf premiums at about $5.50 a tonne on Monday, up from about $5 a tonne on Friday.
Four cargo trades were reported in the Platts window, totalling 40,000 tonnes of 380-cst fuel oil. Hin Leong bought 20,000 tonnes of the fuel from PetroChina at a $2 a tonne premium above Singapore quotes for July 4-8 loading. Coastal then sold another 20,000 tonnes of 380-cst fuel oil to Hin Leong at a $1.75 a tonne premium to Singapore quotes for delivery on July 9-13.