Global energy and commodity price reporting agency Argus Media in on Thursday (27 June) provided a marine fuels industry related update:
Shipping company Euronav is likely to take its ultra large crude carrier (ULCC) to Singapore — the world's largest bunkering hub — once it has finished loading the tanker with marine fuels compliant with the International Maritime Organisation's 0.5pc sulphur cap.
The 442,000 deadweight tonne (dwt) ULCC Oceania, whichhas been off Malta since mid-January, loaded up to eight cargoes of IMO compliant fuels and blending components since March, according to ship tracking firm Vortexa data. And it is likely to load up to five more cargoes by the end of August, before heading to Singapore, market participants said. Italian refiners Saras and Iplom, Nigeria's Sahara and Israel's ORL sold cargoes to Euronav.
Filling up the Oceania is part of Euronav's strategy to store compliant marine fuels ahead of the IMO 2020 cap. The firm is likely to seek to benefit from more profitable margins for 0.5pc marine fuel in Singapore owing to strong demand in Asia-Pacific, market participants said. Singapore marine fuel sales amount to around 4mn t/month. Euronav did not reply to requests for comments.
Euronav started to purchase 0.5pc fuel oil at premiums of $30-40/t to 1pc fuel oil spot west Mediterranean cargoes since March, market participants told Argus. The premium reported to Argus would suggest outright prices of $445-455/t for the marine fuel purchased by Euronav, based on current price indications. Argus assessed 0.5pc fuel oil in Singapore on a fob cargo basis at $510.75/t yesterday.
And prices for IMO compliant fuels could rise further in the coming months, as storage demand increases ahead of the 2020 deadline. Some market participants said the 0.5pc fuel oil premium to high-sulphur fuel oil in Singapore could reach $175/t in the fourth quarter, up from $114/t in the third quarter. And viable storage economics have already started to support demand for 0.5pc fuel oil in Asia-Pacific.
Premiums for 0.5pc fuel oil to 1pc fuel oil reached $55/t this week in the spot market, up from $35/t in previous weeks, owing to firmer demand from Asia-Pacific and the Mideast Gulf. Total, Shell and Russia's Litasco are trying to source 0.5pc fuel oil for eastbound exports, driving prices higher. Companies in Europe have also started storing 0.5pc fuel oil.
Source: Argus Media
Published: 28 June, 2019
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