SINGAPORE: Cash premiums for Asia's fuel oils eased as vessels offloaded fresh arbitrage cargoes and other vessels queued up outside Singapore's terminals, but traders remained concerned about the quality of fuel oil aboard the ships.
"There's a good amount of fuel oil out there but a lot of the stuff that's been coming in is off-spec that needs blending which takes time," said a Singapore-based trader adding that the shortage of on-specification fuels could last until the end of the year.
In the Platts window, industry participants said buyers were less aggressive in their bidding on Wednesday with bids at a no premium to Singapore quotes. This compares to buyers bids as high as $2 to $3 a tonne to Singapore quotes on Tuesday, sources said.
Cargoes of the 380-cst fuel oil were also offered by suppliers in the window at lower premiums compared to Tuesday, sources said.
Two cash deals were reported in the window on Wednesday totalling 60,000 tonnes of the 380-cst fuel oil for delivery at the back end of the window between Dec. 18-22 and Dec. 19-23. The deals were said to have been concluded at premiums of around $2 to $3 a tonne to Singapore quotes.
On Tuesday, 100,000 tonnes of the 380-cst fuel were traded through three cash deals at a higher premium of $3.25 a tonne to Singapore quotes.
Industry sources said suppliers would typically be more eager to clear their fuel oil inventories as the year comes to an end for accounting purposes but that buyers, for the same reason, would likely be less inclined to take on cargoes unless they had immediate outlets for them.
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