180 CST fuel oil cash differential hits 80-month low on weak demand

The cash differential for FOB Singapore 180 CST high sulfur fuel oil narrowed to its lowest level in 80 months Wednesday, July 1, due to weak demand.

The cash differential for FOB Singapore 180 CST HSFO was assessed down $1.41/mt day on day at minus $6.25/mt Wednesday, the lowest since November 4, 2008, when it was assessed at minus $8.25/mt, Platts data showed.

The cash differential for physical fuel oil represents the price buyers are willing to pay above or below benchmark values published around the day a cargo loads.

Industry sources in Singapore attributed the weakness in the 180 CST cash differential to the ample supply of 380 CST in Singapore’s fuel oil pool.

180 CST HSFO is typically used as a cutter stock to blend down high viscosity fuel oil to 380 CST, which the majority of vessels use.

The ample supply of 380 CST in Singapore has reduced demand for 180 CST fuel for such blending. “Since the 380 CST fuel oil [market] is well supplied, there isn’t much need for 180 CST,” a trader in Singapore said.

“Market players aren’t interested to buy 180 CST even though the price is discounted,” the trader added.
Source: Platts