Singapore MOC fuel oil swaps trades drop to two-month low in Dec as HSFO deals shrink

The volume of Singapore fuel oil derivatives traded during the Platts Market on Close assessment process in December dropped 7.7% month over month to 13.97 million barrels as high sulfur fuel oil trade volumes decreased for the first time in four months, Platts, part of S&P Global Energy, data showed.

The overall fuel oil swaps trades, which hit a five-month high of 15.14 million barrels in November, have now posted their lowest monthly volume since October, when 10.31 million barrels of fuel oil swaps were traded. The December trades, however, were about 81% higher compared with the corresponding month in 2024, the Platts data showed.

Singapore HSFO swaps trades shrank 7.35% month over month to 11.21 million barrels in December, touching the lowest monthly volume for the grade since October, when 8.28 million barrels of HSFO were traded, Platts data showed.

Of the total HSFO swaps traded in December, 4.32 million barrels were that of the benchmark 380 CST HSFO trades, down about 60.5% from November, when they had touched a five-month high, the data showed.

The monthly drop in traded volumes follows wider negative time spreads for the Singapore HSFO swaps. The M1-M2 inter-month spread for the 380 CST HSFO grade, which has stayed in a persistent contango structure since second-half October, averaged minus $2.83/metric ton in December, compared with an average of minus $2.57/mt in November, Platts data showed.

The Asian HSFO market is expected to gain some support in 2026, buoyed by persistently higher bunker fuel sales due to the growing number of scrubber-installed ships. However, competition with cleaner alternative fuels and ample availability of sanctioned cargoes would continue to weigh on fundamentals, Platts reported earlier.

Platts assessed the Singapore 380 CST HSFO cargo's cash differential to the Mean of Platts Singapore 380 CST HSFO assessment at a discount of $2.25/mt at the Asian close Jan. 2, compared with minus $2/mt Dec. 31. The benchmark HSFO cash discount has widened 42.4% in the week of Dec. 26, Platts data showed.

In December, the volume of 180 CST swaps trades rose to 857,000 barrels compared with 440,000 barrels in November, Platts data showed.

Singapore 0.5%S marine fuel swaps traded volume decreased 9.4% month over month to 2.76 million barrels in December, Platts data showed. The December traded volume for the International Maritime Organization 2020-compliant grade was about 7.5% higher on a year-over-year basis, the data showed.

The M1-M2 intermonth spread for FOB Singapore 0.5%S marine fuel swaps averaged minus $1.10/mt in December, compared with the November average at a narrow backwardation of plus 26 cents/mt, Platts data showed.

The Asian LSFO market is expected to face headwinds in 2026 amid a supply glut due to lackluster bunkering demand prospects for the IMO 2020-compliant marine fuel grade, Platts reported earlier.

Platts assessed the Singapore 0.5%S marine fuel cargo's differential to the MOPS Marine Fuel 0.5%S assessment at a discount of 83 cents/mt at the Asian close Jan. 2, narrowing from minus $1.42/mt in the preceding session, but the cash differential posted a weekly drop of 6.4%, Platts data showed.

In the physical market, the total volume of FOB Singapore fuel oil cargoes traded during the Platts Market on Close assessment process decreased 79.5% month over month to 328,000 metric tons (about 67,187 b/d) in December, led primarily by a drop in high sulfur fuel oil deals, S&P Global Energy data showed.

The HSFO market saw a total of 140,000 mt traded during the MOC in December, all of which was the mainstream 380 CST HSFO grade, while there were no 180 CST HSFO cargo trades during the MOC in December, Platts data showed.

The physical trades for FOB Singapore 0.5%S marine fuel rose 4.4% month over month to 188,000 mt in December, recording the highest monthly volume of trade for the grade since August, when 200,000 mt were traded, according to Platts data.

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