Singapore Q1 bunker term premiums lowest in at least two years
SINGAPORE Jan 7 (Reuters) - Singapore ex-wharf bunker fuel term contracts for the first quarter of 2013 were done at their lowest level in at least two years due to subdued demand from shipowners and a persistent supply glut, trade sources said on Monday.
The term contracts were concluded at premiums of $2.00-$3.00 a tonne above 380-centistoke (CST) fuel oil cargo benchmark prices, according to the sources.
That is sharply lower than last quarter's term premiums of $6.00-$7.00 a tonne.
"I don't recall seeing this range in the past two years at least," said a bunker source.
Demand from end-users has been weak, with November 2012 bunker sales in Singapore plunging to an eight-month low of 3.27 million tonnes, official data by the Marine and Port Authority (MPA) showed.
Figures for December will be released later this week, but industry sources estimated that total sales for 2012 would not match the previous year's record high of 43.2 million tonnes.
"We didn't see much improvement in December, it's probably flat or slightly lower," said a second bunker source.
Spot ex-wharf premiums have been hovering between parity to $1.00 a tonne in recent weeks, reflecting the weak market sentiment.
The Asian fuel oil market continues to be depressed by high volumes of imports from the West, which are expected to hit 5.6 million tonnes this month.
February volumes are also looking high at around 4 million tonnes of Western fuel oil provisionally booked so far to be shipped to Asia.
However, sentiment could improve as a tightening European market may limit the flow of supplies to Asia in the coming months, traders said.
In early Monday trade, fuel oil's balance January/February intermonth spread was at its highest in more than two months at a $1.50 a tonne contango, Reuters data showed. (Reporting by Lee Yen Nee; Editing by Joseph Radford)
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