Singapore MOC traded fuel oil swaps volume drops 15% on month in January

The volume of Singapore fuel oil derivatives traded during the Platts Market on Close assessment process dropped 14.6% on the month to 13.84 million barrels in January, S&P Global Commodity Insights data showed, dented by lower volumes in high sulfur fuel oil trades.

On the year, the total traded volume was up 54.6% in January, the data showed.

Singapore high sulfur fuel oil swap trade volume slipped about 23% for the second straight month to 10.03 million barrels in January, out of which 8.32 million barrels were 380 CST trades, the data showed.

The drop in traded volumes comes on the back of weaker prompt time spreads for Singapore high sulfur fuel oil swaps. The M1-M2 spread for the 380 CST grade, which has stayed in a contango since Jan. 23, was assessed at minus $3.25/mt Feb. 1. It averaged at $1.34/mt in January, compared with a backwardation of $5.98/mt in December, S&P Global data showed.

Platts assessed the Singapore 380 CST high sulfur fuel oil cash differential to the MOPS 380 CST HSFO assessment lower at a discount of $4.58/mt Feb. 1, a level last seen Nov. 21, S&P Global data showed.

The 180 CST swaps trades also slumped to 570,000 million barrels in January, down from 1.17 barrels in December, S&P Global data showed.

A persistent supply glut in the region due to steady inflows from the Middle East and Russia continues to weigh on Asia's HSFO market, while February typically tends to witness sluggish bunkering demand due to the Lunar New Year holidays, traders said.

Marine fuel swaps volume rise

Meanwhile, Singapore marine fuel 0.5%S swaps trade volume in January climbed to 3.8 million barrels, about 22.5% higher from December, which registered the smallest monthly traded volume for LSFO in 2023, S&P Global data showed.

The prompt M1-M2 inter-month spread for FOB Singapore marine fuel oil swaps has averaged at a backwardation of $6.60/mt in January, slightly lower from an average of $6.90/mt in December, data from S&P Global showed.

The Asian low sulfur fuel oil market is expected to remain supported in February amid lesser arbitrage inflows from the West in the near term. The world's largest bunkering hub of Singapore is expected to receive around 1.7 million-1.8 million mt of LSFO from the West in February, down from about 2.3 million-2.5 million mt scheduled for January, S&P Global reported earlier.

Platts assessed Singapore marine fuel 0.5%S cash premium over Mean of Platts Singapore marine fuel 0.5%S assessment at $6.75/mt Feb. 1, down from $7.67/mt Jan. 31. The cash differential, which reached over a seven-week high of $10.75/mt Jan. 26, averaged at a premium of $5.42/mt in January, compared with the December average of plus $7.72/mt, S&P Global data showed.

Singapore MOC traded swaps volume ('000 barrels):

Source: S&P Global Commodity Insights