Cash Premium for CST Fuel Oil in Singapore Rose to Record High

Image by gerholdt from Pixabay

The cash premium for cargoes of 380-centistoke (cst) high-sulfur fuel oil (HSFO) in Singapore rose to a record on Tuesday (26 Aug), according to Reuters.

Boosted by intense buying interest amid shrinking supplies, the cash premium for 380-cst HSFO jumped to $30.88 per tonne to Singapore quotes on Tuesday – up from $23.09 a tonne in the previous session.

The latest record exceeds the previous high of $24.31 per tonne on 11 July, one of the first signs of the impact of a shift in global ship fuel rules set to occur in 2020.

“The cash premium has been boosted by increasingly tight Singapore supplies of HSFO ahead of a shift in global ship fuel rules set to occur in 2020, three Singapore-based fuel oil traders said on Tuesday,” Reuters said.

Meanwhile, the report also shared how the International Maritime Organization has mandated that ships use bunker fuel with a sulfur limit of 0.5% starting in 2020 from 3.5% currently. 

This means the supply of 3.5% HSFO will lose value at the end of 2019 as the market moves to low-sulfur bunker fuels – resulting in regional refiners producing less of the HSFO ahead of the switch.

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Last updated on

August 28th 2019, 10:53 am

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