Jaslyn Ying of global energy and commodity price reporting agency Argus Media on Wednesday (8 July) published an analysis of the market implications signalled by the recent backwardation of high-sulphur fuel oil in Singapore:
The high-sulphur fuel oil (HSFO) market in Singapore has moved into backwardation for the first time in four months because of surging demand for the fuel as a feedstock for power plants and refineries.
The market moved to a backwardation — with prompt prices at a premium to forward prices — yesterday, when prompt-month July 380cst and 180cst swaps were at premiums of $2/t and $1.50/t respectively to August. The intermonth spread for the HSFO grades was last in backwardation on 3 March.
The market structure has strengthened on signs that regional demand will remain robust throughout the summer because of power generation needs.
Pakistan’s state-owned marketer PSO returned to the spot market at the end of June after a 14-month absence, seeking HSFO for July delivery. PSO this week sought more HSFO for August delivery to Karachi.
State-controlled Saudi Aramco’s trading arm in Singapore, ATS, last month chartered the Aframax Seabravery to load 80,000t of fuel oil from Singapore on 18-20 June to head towards the Red Sea port of Jeddah. Traders expect more HSFO to head towards the Red Sea from Singapore or the straits of Malacca in the coming weeks to meet summer demand for fuel oil as a power generation fuel.
The HSFO market has also found support from a fall in refinery runs, as well as moves by refinery operators to raise production of bitumen at the expense of HSFO yields.
Demand for fuel oil as a residual feedstock at upgrading units in July and August is also rising.
Cuts to term Mideast Gulf crude allocations for Asia-Pacific buyers in June-July have driven refiners to the spot market for residual fuel to feed their upgrading units. South Korean refiners may have already booked July- and August-loading straight-run fuel oil cargoes from the Middle East and boosted their requirements compared to June.
The Singapore 180cst HSFO discount to front-month Dubai crude swaps narrowed to an average of $3.11/bl in June from an average of $4.33/bl in May. The discount was at $3.33/bl yesterday compared to $3.79/bl a day earlier.
Photo credit and source: Argus Media
Published: 9 July, 2020
‘High-sulphur resid was replaced by VLSFO sales in Panama, because VLSFO sells at a discount to MGO,’ reports Argus Media.
Joint Study focuses on issues of ammonia as a bunker fuel, including development of ammonia fuelled ship and worldwide supply chain.
Bunker barge owners and operators; traders and suppliers; banks, including players in other countries, will have to re-examine respective operations, advises Helmsman Associate Director Jonathan Tan.
The company started working with Qatar Petroleum over bunkering operations in 2017.
Singapore’s swelling inventory has not prevent shortages, but constraints in bunker delivery infrastructure during the transition to low-sulphur fuels remain a concern.
Global marine insurer North P&I club has opened a new office in Piraeus, Greece, it said this week.
Between November 2016 and October 2017, Mr Tan falsified at least 20 invoices and submitted these invoices to UOB and OCBC, according to court documents obtained by bunkering publication Manifold Times.
‘CSM Taurus arrived in Singapore during mid-September and is currently undergoing final preparations before starting commercial operations,’ General Manager of CSM tells Manifold Times.
Criminal syndicate’s tampering with MFMs on bunker tankers Southernpec 6 and Southernpec 7 conceptualised by three masterminds and carried out by cargo officers on board, according to joint statement.
Seeks information connected to SGS COQs of Gas Oil and Marine Diesel Oil cargoes loaded on board Vinalines Glory from the Vopak Banyan Terminal in Singapore between January and February 2013.
Additional topics of bunker contamination and OCM services discussed at VPS’ Fuel Management Challenges – The Year of 2021 & Beyond webinar on 23 September; Manifold Times summarises the session.
‘The JMs have failed to discharge their duties by blindly helping the Banks mount a false case against the Defendant,’ wrote defence lawyers representing former IPP Director Dr Goh Jian Hian in court statement.
