Singapore — The premium for Tokyo Bay delivered 380 CST bunker fuel over Mean of Platts Singapore 380 CST high sulfur fuel oil assessments dipped 70 cents/mt day on day to a one-month low of $34.17/mt Thursday on incremental supply from a refinery, S&P Global Platts data showed.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
It was last lower at $32.72/mt on November 9.
Market sources said incremental supply from one refiner was pushing prices lower. Cosmo Oil was heard opting to sell fuel oil into the bunker fuel market as refining margins for middle distillates were slim. This increased bunker fuel supply and lowered spot prices as a result.
"Spot volumes for December is slightly more than usual, the middle distillate market is not very good," a source close to the matter said.
"It is cost effective to sell fuel oil instead of putting it into the secondary refinery system when middle distillate product price is cheap," a trader said.
Bunker fuel demand was steady, but lower month on month, market sources said.
In Japan, demand usually picks up in November and slows down after as vessels take bunker fuel for two voyages to avoid bunkering at the end of December, when barge operators halt operations.
This year, bunker operations will be suspended from December 28 to January 3, market sources said.
"Dry bulk carriers have been taking bunkers for two trips in November, to avoid taking bunkers in December," a trader said.
"December demand is good, but still not as good as November," a second trader said.
--Teo Su Ling, email@example.com
--Edited by Norazlina Juma'at, firstname.lastname@example.org