Asia Fuel Oil-Bunker premium highest in over two months

SINGAPORE (Reuters): Asia’s bunker premium, the price difference between ex-wharf marine fuel and cargo prices, rose to a 11-week high last week, as players sought to keep cargo prices competitive.     The June 380-centistoke (cst) swap closed over three dollars lower at $671.75 under the weight of 180,000 tons transacted during the trading window.

Traders PetroChina and Vitol were also seen offering down the 380-cst cash differential in the physical trading window, registering offers at a premium of around $2.75 a ton above Singapore spot quotes.

 Expectation of firm demand for marine fuels as ship owners are likely to take advantage of the lower price levels have, however, kept ex-wharf prices steady at around $685.00 a ton for a third session.

 Though at this price level, Singapore bunker prices remain the lowest compared to other regional ports such as Japan, Hong Kong, South Korea and Taiwan where levels still hover around $700.00 a ton and above.

Anticipating the need of more supplies, Shell was seen chartering the Silver Bridge to move 80,000 tons of fuel oil from Negishi port to Singapore around May 16.

More demand support from South Korea was also seen, with Western Power seeking 60,000 tons of fuel oil. The tender for two 30,000-ton lots, for June 21-25 and July 5-9 delivery to Pyongtaek, will close on May 16.

 Japan’s inventory of fuel oil also fell for the week ended April 28, slipping 1-3 percent for its low-sulphur and high suplur grades respectively despite production revving up.