Singapore marine fuel 0.5%S-380 CST HSFO spread widens to all-time high on weak HSFO
8th June 2022 09:54 GMT


The price spread between Platts Singapore marine fuel 0.5%S and 380 CST high sulfur fuel oil widened to an all-time high June 7 due to weak 380 CST HSFO values given ample supply, S&P Global Commodity Insights data showed.


The spread was assessed at $432.63/mt June 7, while the previous highest was $417.54/mt on May 30. Singapore marine fuel 0.5%S was assessed at 1,020.69/mt on June 7, down $4.83/mt day on day, while the 380 CST HSFO was assessed at $588.06/mt, down $26.03/mt day on day, S&P Global data showed.

Wider spreads between marine fuel 0.5%S and HSFO typically benefit shipowners who own scrubber-fitted ships.

The 380 CST HSFO was particularly weak on increasing supply from the Middle East, traders said. Saudi Arabia's fuel oil exports were 1.04 million mt in May, up 5.1% from April, according to Kpler shipping data. Supply from Iraq also rose with May exports climbing to 900,000 mt, up 34.5% from April.

Market sources also said Asia could become one of the key destinations for Russian fuel oil cargoes because of sanctions that prevent flows to the US and the EU.

In addition, a fuel oil trader said: "Refining margins are so good, refiners are maximizing their run rates. High sulfur fuel oil is coming out of the refineries."

As a result, the cash differential for Singapore 380 CST high sulfur fuel oil slumped to a near one-year low of minus $1.50/mt June 7, the lowest since June 11, 2021, when it stood at minus $1.77/mt, S&P Global data showed.

Meanwhile, marine fuel 0.5%S has slipped off its historical high, but tight supply continued to support the market. Sources said it was hard to secure cutter stocks which can be also used as feedstock for secondary units to produce gasoil and gasoline.

Bunkerworld ,
8th June 2022 09:54 GMT