SINGAPORE: Cash premiums of Asia's 380-cst fuel oil jumped on Thursday amid ongoing concerns of limited availability of immediate on-specification supplies prompted by a shortage of cutter stocks and congested loading terminals, traders said.
No cash deals were reported in the Platts window on Thursday as buyers continued to heavily outnumber suppliers, industry sources said.
A total of 16 bids for 380-cst fuel were left standing by the end of the Platts window trading session on Thursday, compared to just three offers.
Despite the lack of deal activity, stronger bids lifted cash differentials of actively traded 380-cst fuel oil to $2.28 a tonne to Singapore quotes, its highest level since March 23 when the so-called March bull play pushed premiums to multi-month highs.
"Some players out there are tight on supplies and those that really need prompt cargoes are biding up prices, but there's very few suppliers," said a Singapore-based trader.
Adding to concerns of the limited on-specification supplies, two Western-based multinational's were said to have run out of RMG grade fuel (380-cst fuel oil), while another large Asian-based player was said to be in possession of an off-specification cargo, according to three industry sources.
This came as onshore inventories of Singapore fuel oil edged 303,000 barrels lower (about 45,000 tonnes) in the week to Nov. 2 to a total of 22.87 million barrels (or 3.41 million tonnes).
While the 1.3 percent decline from the previous week was seen by industry participants as marginal, the latest draw does represent a 1.5 million barrel (219,000 tonnes) drop in inventories following six consecutive weeks of declines from 24.33 million barrels (3.63 million tonnes) in the week to Sept. 21.
Some traders anticipated a significant build to emerge over the next weeks as cargoes, prompted by widening arbitrage opportunities, head to Singapore.
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