06SEP2019 - NEWS - Asia fuel oil spot premium at record, market says last sputter before dying out

Asia’s spot premium for marine fuel benchmark 380-centistoke (cst) high-sulphur fuel oil (HSFO) has touched record highs this week as shippers clamoured for limited supplies ahead of a sulphur cap in shipping fuels that starts next year.

The cash premium for 380-cst HSFO rose in the three consecutive sessions through Wednesday, hitting $41.01 a tonne above Singapore quotes, more than 10 times higher than a year ago.

The HSFO premiums are expected to ease in coming months, though, as shippers from 2020 comply with the new International Maritime Organization (IMO) rules requiring the use of bunker fuel with a sulphur limit of 0.5%, down from 3.5% currently.

“Finished grade residual marine fuels are in short supply owing to IMO 2020,” said Matt Stanley, an oil broker at StarFuels in Dubai.