Singapore — Singapore high sulfur fuel oil viscosity spread, or the spread between 180 CST and 380 CST grades, narrowed to $6.69/mt Friday -- the lowest since March 7 on relatively strong 380 CST HSFO prices, S&P Global Platts data showed.
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The viscosity spread was last lower at $6.41/mt on March 7, Platts data showed.
Platts assessed 180 CST HSFO at $463.70/mt Friday, up $2.93/mt day on day, while 380 CST HSFO was assessed $3.97/mt higher at $457.01/mt.
"I think [the narrowing of the viscosity spread] is due more to 380 CST strength," a trader based in Singapore said.
"The market is short of bunker grade," another trader said. The 380 CST grade is the main product sold in the bunker market. Traders said bunker demand has been steady in Singapore.
Adding to this, strong demand for 380 CST fuel oil from Saudi Arabia has lent support to the market, traders said. While Saudi Arabia is a net exporter of fuel oil, it has been buying around 1.5 million-2 million mt from Europe for July since June, traders said.
Meanwhile, "the 180 CST market is not so weak ... supply is still tight," a trader said.
Singapore's HSFO market has been strong for both 180 CST and 380 CST grades since May because of lower arbitrage inflows, while strong Middle Eastern demand has also capped supplies to the East.
The arbitrage trade to move cargoes from the West to Singapore is not viable because of the narrow East/West spread.
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--Edited by Irene Tang, firstname.lastname@example.org