Asia/Pacific News
Singapore's Discount to Global VLSFO Prices Narrows
Singapore, the world's largest marine fuels hub, is seeing a narrowing discount to global VLSFO prices on strong demand.
Compared to Ship & Bunker's G20-VLSFO Index of prices across 20 leading bunkering ports, Singapore saw discounts of just $15.80/mt so far this month and $11.24/mt in May, following discounts of $20.75/mt in April and $30.02/mt in May.
Singapore is now decidedly more expensive than Rotterdam, Fujairah and Houston for VLSFO, with a premium on Wednesday of $48/mt to Houston, the cheapest of the four. At the end of the first quarter VLSFO in Houston was just $2.50/mt cheaper than Singapore.
Singapore saw its bunker sales jump by 13.4% on the year in April, and gain 1.9% from March's level.
Changes in tradeflows may also be part of the picture. Singapore had been receiving significant quantities of Russian fuel oil earlier this year, but much of this material is now being bought by Saudi Arabia to meet its peak summer power demand.
"Near term avails are quite tight," a local market source in Singapore told Ship & Bunker this week.
"Some suppliers are already having earliest slots from the 18th June onwards.
"But I think the tightness is due to the close arb from Europe.
"I do see that easing in about a week or two as cargoes start flowing in again, more significantly from the Kuwaiti refinery."
