Fujairah bunker demand has seen a slight uptick in recent weeks as prices become more competitive with Singapore port, trade sources said late Monday.
The Fujairah-Singapore delivered bunker fuel spread averaged minus $6.70/mt in H2 July, falling from an average of plus 9 cents/mt in H1 July.
The spread stood at minus $8.25/mt Monday, with Singapore delivered 380 CST bunker fuel assessed at $461/mt and Fujairah delivered 380 CST bunker fuel assessed at $452.75/mt, the data showed.
Some Fujairah trade sources said bunker sales increased towards end July and early August and attributed this to the price disparity with Singapore bunker prices.
"Fujairah is now cheaper than Singapore, so some vessels may shift here if they have requirements and if they are able to do so," a bunker fuel trader in Fujairah said.
Meanwhile, stocks of heavy distillates and residues in Fujairah rose 1.3% to 10.322 million barrels in the week to July 30, remaining above 10 million barrels for the second week in a row, and at the highest since December 11 last year, the Fujairah Energy Data Committee said last week.
This was in contrast to Singapore, where the commercial stockpile of residues plunged to a nine-year low of 14.799 million barrels in the week ended August 1, IE Singapore data showed last week.
Low arbitrage supply has led to strong cargo cash differentials and steep backwardation in the Singapore high sulfur fuel oil market in recent weeks, which in turned supported Singapore bunker fuel premiums in H2 July.
In addition, concerns over off-spec bunker fuel in Singapore could also have led to a shift in demand towards Fujairah, some sources said.
"Fujairah has been quite busy since last week due to lower prices than Singapore, but possibly also due to recent fears of off-spec bunker at Singapore," a bunker fuel supplier said.
For the past two weeks, bunkering sentiment had been cautious in Singapore owing to quality concerns, Singapore bunker trade sources said.
Singapore and Fujairah are among the world's top bunkering ports.