SINGAPORE: Asia's physical and swaps fuel oil markets shrugged off a sharp build in Singapore's onshore inventories of the industrial fuel amid continued concerns about prompt availability of on-specification cargoes and bunker fuels, industry sources said.
Onshore inventories of Singapore fuel oil jumped 15 percent in the week to Nov. 16 following five consecutive weeks of declines.
Last week's 3.182 million barrel, or 475,000 tonne, inventory build represents the largest weekly volume change since the week of May 18.
"Some suppliers are still short on (fuel) oil and some of (the fuel oil) coming in still needs to be blended," said one Singapore-based trader.
Other traders pointed to high traffic at some of the island-state's fuel oil terminals, firm demand for bunker fuel and busy bunker barge loading schedules as supporting factors for cargo and ex-wharf premiums.
Cash premiums of the 380-cst fuel oil rose 45 cents a tonne from Wednesday to a near eight month high of $2.91 a tonne above Singapore quotes. Premiums of the 380-cst fuel had risen to $2.92 a tonne on Nov. 7, their highest since March 23.
Cash premiums of the 380-cst fuel were lifted by higher deal levels in the Platts window on Thursday.
PetroChina bought one 20,000 cargo of the fuel from Gunvor at a premium of $3 a tonne, followed by another purchase from Shell at a premium of $3.50 a tonne, both for delivery between Dec. 2-6, sources said.
Glencore and Gunvor also bought 20,000 tonnes each of the 180-cst fuel from Hin Leong for delivery between Dec. 2-6 and Dec. 5-9, respectively. Glencore paid $273 a tonne for its cargo, or approximately an 11 cent premium to Singapore quotes, while Gunvor paid a premium of $2 a tonne to Singapore quotes.
While no spot ex-wharf deals were reported on Thursday, offers were said to have ranged between $272 and $274 a tonne boosting ex-wharf premiums to $3.94 a tonne to Singapore quotes.
At least one term ex-wharf deal was reported for December at a premium of $3.50 a tonne to Singapore quotes, industry sources said.
In the swaps market, the time spreads of the 380-cst fuel on the Intercontinental Exchange (ICE) widened their premiums across the prompt curve, from Dec/Jan to March/April, amid elevated trading volumes, sources said.
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