Singapore bunker prices were stable on Tuesday despite higher spot fuel oil cargo levels as bunker premiums shrank and supply tightness eased further, traders said.
The supply squeeze for 380-centistoke fuel oil in Singapore continued to ease with the arrival of the supertanker, TI Europe, off Indonesia's Karimun Islands, in the early hours on Tuesday.
The cargo is expected to be ready for the market in about three days or so.
Dealers said 380-centistoke (cst) bunker fuel oil was pegged at $183-$185 a tonne, unchanged from Monday, while 180-cst prices were at $190-$192.
However, bunker premiums fell to $4.25 a tonne, down from the previous day's $5-$6, with no deals heard.
"It will be some time before we see sustained bunker premiums of above $5 a tonne again, given the heavy volumes of cargoes coming in. But it was good while it lasted," said a Singapore-based bunker supplier.
Supplies of 380-cst fuel oil, mainly consumed by the 1.9-million-tonne a month Singapore bunker industry, has been tight since late August.
The supply squeeze was caused by a lack of ready-made 380-cst fuel oil and high-viscosity material, normally blended to produce bunker grade 380-cst, in the market.
The squeeze, which had dragged on for about three weeks till last Friday, had pushed up bunker premiums, the price difference between spot 380-cst cargo values and outright bunker prices, for prompt-delivery bunker supplies.
For some deliveries, especially for bunker fuel sold by some majors, the premiums were as high as $10 a tonne, well above the average premiums of $2-$4.
A bunker trader with an oil major said he had sold at least 10,000 tonnes of bunker fuel over three days last week at premiums of $9-$11 a tonne.
On Monday, the premiums for prompt-delivery cargoes had shrunk to about $5-$6 a tonne as ship owners, aware of incoming supplies, opted to wait for prices to fall.