Singapore: Premium on 380 CST Driven by Strong Fundamentals

by Ship & Bunker News Team
Monday July 2, 2018

A persistent crunch in supply of fuel oil to Asia driven by reduced shipments from exporters like Iran and Venezuela has pushed a key fuel's cash premium to Singapore prices to a three-year peak, with levels expected to stay high for another month, Reuters reprts.

The Asian cash premium for the bunker market's key 380 CST grade of fuel oil hit $5.28 a metric tonne (mt) on June 29, its highest since mid-2015.

"Lower volumes from Venezuela and Iran are certainly contributing toward a tighter fuel oil balance," Joe Willis, senior research analyst at consulting firm Wood Mackenzie, was quoted as saying.

Venezuela was expected to export 40,000 barrels per day (bpd) of fuel oil this, down from 100,000 bpd in 2017.

Iran's oil exports have been hit as the United States re-imposes sanctions on the Islamic Republic over its disputed nuclear programme, according to the report.