Marine fuel sales in Singapore surged to a one-year high in October, latest official data showed on Monday, as more competitive prices attracted ships to refuel at world’s top bunkering hub.
October bunker sales totalled 4.25 million tonnes, climbing 7% from September, while vessel arrivals for bunkering at Singapore rose 9% month-on-month at 3,431 vessel calls, data from Singapore’s Maritime and Port Authority showed.
Prices for ship refueling were lower at Singapore in October, compared with other regional bunkering ports such as Zhoushan and South Korea, bunker fuel traders said. Earlier weather disruptions in North Asia kept bunker fuel premiums elevated at North Asian ports. Sellers were also trying to clear inventories before the year ends amid a strong market backwardation, which means the current value is higher than it will be in later months and encourages traders to release oil from inventories.
“There was pressure among sellers to clear inventories due to steep backwardation in the prompt time-spread that was over $20/tonne (last month) and rising interest rates that make the cost of carry expensive and too painful for some players,” said Yaw Yan Chong, director at Refinitiv Oil Research in Asia.
The selling pressure has continued into November as the backwardation remains steep at around $8/mt and interest rates are still high, Yaw added. Total sales of low-sulfur marine fuel oil at Singapore rose 5% from the previous month to 2.59 million tonnes, while total sales of high-sulfur marine fuel oil climbed 18% to 1.31 million tonnes. “HSFO deliveries showed the greatest increase in October as prices fell due to weaker cracks, while suspension of Glencore’s bunkering license ended in H2 October,” said Ivan Mathews, said Ivan Mathews, head of FGE’s Asia Refining and Global Fuel Oil Service. Meanwhile, total marine gasoil sales were down 6% as high prices of the product deterred uptake, compared with marine fuel oil grades.
Bunker fuel premiums for 0.5% low-sulfur fuel oil trended lower into October after fuel oil.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Eileen Soreng)