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.