Singapore 180 CST HSFO cash differential to MOPS 180 CST slips to deeper discount

The cash differential for FOB Singapore 180 CST high sulfur fuel oil against the Mean of Platts Singapore 180 CST HSFO cargo assessments slipped further into negative territory as buying interest slowed down amid crude volatility.

The differential was assessed at minus 83 cents/barrel Tuesday, down from minus 7 cents/b on Monday, the lowest since July 2014 when it was assessed at minus $1.95/mt.

The differential was also assessed at a discount of 25 cents/mt on January 6 but recovered and was assessed at a premium of 63 cents/mt on January 8.

Regional demand had fallen significantly after the plunge in Western crude markers, traders said.

“It is all about the buyers’ view on flat price movement,” a Singapore-based trader said, adding that there had been very little change in actual demand.

“But buyers want to delay their buying decision as late as possible,” he added.

Meanwhile, Chinese buyers were said to be looking for fuel oil for stockpiling ahead of the Lunar New Year in mid-February.

It was not immediately clear, however, if the buying interest had translated into actual purchases.

“There is some Chinese demand mainly for straight-run fuel oil,” a trader said, adding that they might prefer to buy crude oil instead given the current low prices.

On a per barrel basis, Platts’ physical FOB Singapore 180 CST HSFO assessment on Tuesday worked out to $40.48/b, while FOB Sudan Dar Blend crude was assessed at $35.62/b.

China is a frequent buyer of Dar Blend crude oil on a spot basis.

No trade in 180 CST HSFO cargoes was seen during the Market on Close assessment process so far this week.

Western trader Mercuria had submitted the best offer Tuesday for a 20,000-mt cargo of FOB Singapore 180 CST HSFO loading over January 30-February 3 at MOPS 180 CST HSFO assessments minus 25 cents/mt or for a 20,000-mt cargo loading over February 5-9 at MOPS 180 CST HSFO assessments minus $1/mt.

KIB Energy had the best bid for a 23,000-mt cargo loading over February 5-9 at MOPS 180 CST HSFO assessments minus $1/mt.