Singapore bunker premiums for 1Q tenders remain stable
Negotiations for bunker term supplies for the first quarter of 2021 in Singapore have largely concluded.
Premiums for delivered very low-sulphur fuel oil (VLSFO) were at around $12-15/t to 0.5pc sulphur marine fuel cargo prices in November, before declining to $8-9/t in December in line with falling spot premiums, according to various market sources.
This is largely in line with premiums for the fourth quarter of this year at around $8-10/t, although this has varied widely.
An increasing number of market participants are now using the 0.5pc sulphur marine fuel cargo prices in Singapore as a benchmark, as compared with the 10ppm gasoil cargo price. "During this latest tender round, about half of the contracts were done [on the basis of] 0.5pc [sulphur marine fuel oil cargo prices] compared with only 25pc throughout most of 2020," according to one buyer.
"[Prices based on] 0.5pc [sulphur marine fuel cargo values] are relatively more stable than 10ppm, but most of the cargo sellers with refineries, for instance oil majors, should still sell [on the] basis [of] 10ppm," said one local trader.
Sentiment in Singapore has remained robust overall, although this depends largely on the market segment. "The container market is strong, speeds are up and fleet deployment is practically 100pc of available tonnage," according to one buyer. "This is translating into strong bunker demand in the major hubs, where port stays are longest and supply is reliable," he said.
Demand in Singapore was strong last week ahead of the Christmas holiday, with Argus reporting a total of 56,245t in spot deals during the first three days of the week compared with 45,615t over the same period the week before.
But most market participants are worried that this surge in demand will fade after the new year holidays this week and that the global demand outlook remains very uncertain because of the Covid-19 pandemic.
Bunker consumption in Singapore has been strong this year, with total sales over the first 11 months of 2020 reaching 45.54mn t, up by 2.55mn t from last year. Singapore, along with Zhoushan and other Chinese ports, has seen an increase in demand this year following Hong Kong's stringent 14-day quarantine rules announced in July, which deterred cargo ships planning to bunker there.
Demand for high-sulphur fuel oil (HSFO) in Singapore has also been strong, with sales of over 1mn t in October-November, according to official data. The Hi-5 spread, or the premium of VLSFO to HSFO, was assessed yesterday at $89/t, a nine-month high. The spread may widen because of expected better availability of HSFO in the first quarter of next year and rising flat crude prices, but shipowners will likely not consider installing more scrubbers until the spread hits $150-200/t.
Related news posts
P66 to sell German, Austrian retail business: Update
P66 to sell German, Austrian retail business: Update
Adds number of Phillips 66-owned gas stations in Germany and Austria, company response. Houston, 26 April (Argus) — US refiner Phillips 66 plans to sell its gas station business in Germany and Austria as part of a broader plan to divest non-core assets, the company said in earnings released today. The company sells to retail and wholesale customers under the JET gas station brand across 1,270 sites in Austria, Germany and the UK, according to the refiner's 2022 annual review. JET operated 813 gas station in Germany as of June 2023, according to the country's federal association of independent petrol stations and 154 sites in Austria according to the company website. Phillips 66 has a further 330 gas stations in Switzerland through a joint venture under the Coop brand, but those are not included in the sales effort. The refiner declined to provide details of the current number of sites for sale in Germany and Austria. Phillips 66 has undertaken multi-year cost-cutting projects and said this year it is considering selling some of its midstream assets to satisfy a planned $3bn in divestments. Late last year hedge fund Elliott Investment Management purchased a $1bn stake in the company, calling on it to refocus on its refining business and reduce operating costs. In Elliott's December activist letter to the refiner, the hedge fund said if Phillips 66 failed to make sufficient progress towards its cost-cutting goals, it would push for management changes and a sale of the company's stake in Chevron Phillips Chemicals (CPChem) — valued at about $15bn-20bn after taxes by the investor — and its European convenience stores and other non-operated midstream assets. Elliott previously targeted Canadian integrated Suncor, pushing for board changes and divestment of its 1,500 retail stores, which ultimately it did not sell. US refiner Marathon, however, agreed to sell its 3,900-store Speedway retail network in 2019 following pressure from Elliott, which had criticised its integrated downstream business model. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Start-ups to help Total keep output stable in 2Q
Start-ups to help Total keep output stable in 2Q
London, 26 April (Argus) — TotalEnergies said it expects its oil and gas production to hold broadly steady in the second quarter as planned maintenance is partially offset by rising output from new projects in Brazil and Denmark. The company expects to average 2.4mn-2.45mn b/d of oil equivalent (boe/d) in April-June, compared with 2.46mn boe/d in the previous three months and 2.47mn boe/d in the second quarter of 2023. Production is being supported by the restart of gas output from the redeveloped Tyra hub in Denmark late last month and the start of the 180,000 b/d second development phase of the Mero oil field on the Libra block in Brazil's Santos Basin at the beginning of the year. TotalEnergies first-quarter output was flat compared with the previous three months but 2pc lower than a year earlier as a result of Canadian oil sands divestments. The company reported a robust set of first-quarter results today, broadly in line with analysts' expectations. Profit for the first three months of 2024 was $5.7bn, compared to $5.6bn in the same period last year. Adjusted profit — which takes into account inventory valuation effects and special items — came in at $5.1bn, down by 22pc on the year but slightly ahead of the consensus of analysts' estimates of $5bn. Adjusted operating profit from the firm's Exploration & Production business was down by 4pc year-on-year at $2.55bn, driven in part by lower natural gas prices. The Canadian oil sands asset sales weighed on the segment's production but this was partly compensated by start-ups. As well as Mero 2, the Akpo West oil project in Nigeria started production during the first quarter. TotalEnergies' Integrated LNG segment saw a 41pc year-on-year decline in its adjusted operating profit to $1.22bn in January-March. The company said this reflects lower LNG prices and sales. But while its LNG sales for the quarter fell by 3pc in year-on-year terms, its LNG production was greater by 6pc. TotalEnergies achieved an average $78.9/bl for its liquids sales in the first quarter, an improvement on $73.4/bl a year earlier. But the average price achieved for its gas sales was 43pc lower on the year at $5.11/mn Btu. In the downstream, the company's Refining & Chemicals segment's first-quarter adjusted operating profit was $962mn in January-March, down by 41pc on the year but 52pc higher than the preceding quarter. TotalEnergies attributes the quarter-on-quarter rise to higher refining margins and a rise in refinery throughput . For the second quarter, it expects refinery utilisation rates to be above 85pc, compared with 79pc in the first quarter, boosted by the restart of 219,000 b/d Donges refinery in France. Total's Integrated Power segment continued to improve, registering a quarter-on-quarter and year-on-year increased of 16pc and 65pc respectively in its adjusted operating profit to €611mn. Net power production increased 14pc year-on-year to 9.6 TWh, while the company's portfolio of installed power generation capacity grew 54pc to 19.5GW. Total's cash flow from operations, excluding working capital, was down by 15pc on a year earlier at $8.2bn in the first quarter. The company has decided to raise its dividend for 2024 by 7pc to €0.79/share and plans a $2bn programme of share buybacks for the second quarter. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia's Pertamina to complete gasoline unit in Aug
Indonesia's Pertamina to complete gasoline unit in Aug
Singapore, 25 April (Argus) — Indonesian state-controlled refiner Pertamina aims to finish building its new 90,000 b/d residual fluid catalytic cracker (RFCC) in the Balikpapan refinery in August, the firm said. The RFCC is a gasoline production unit, which typically uses residual fuel as a feedstock. The unit will be able to produce propylene, LPG and 92R gasoline that will meet the Euro V specifications, said Pertamina last week, without disclosing further details such as the start-up date. The newly built RFCC unit will be the largest in Indonesia, with the second-largest being the 83,000 b/d RFCC in Balongan and the third-largest the 54,000 b/d RFCC in Cilacap. The new RFCC will also help reduce Indonesia's reliance on gasoline imports. Indonesia currently imports around 9mn-11mn bl/month of gasoline, making it the largest gasoline buyer in the Asia-Pacific. The new RFCC will increase Pertamina's gasoline production by a conservative estimate of 45,000 b/d or 1.3mn bl, or around 10pc of Pertamina's current import demand, according to estimates from an oil analyst. The installation of the new RFCC is part of Pertamina's Refinery Development Master Plan (RDMP), which will take place in two phases. The first phase includes revamping existing units at the Balikpapan refinery, such as the crude distillation unit, vacuum distillation unit, and hydrocracking unit. It also involves building new units, such as the aforementioned RFCC, a gasoline hydrotreater, diesel hydrotreater, and naphtha hydrotreater. The second phase includes building a new residue desulphurisation unit. The RDMP also includes expanding the capacity of the Balikpapan refinery from 260,000 b/d to 350,000 b/d, said Pertamina's chief executive officer Nicke Widyawati. The Balikpapan expansion is expected to be completed in May. By Aldric Chew Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cepsa supplies HVO bunker fuel in Algeciras
Cepsa supplies HVO bunker fuel in Algeciras
London, 24 April (Argus) — Spanish refiner and bunker fuel supplier Cepsa has recently delivered 150t of 100pc hydrotreated vegetable oil (HVO) by truck to the Ramform Hyperion at the port of Algeciras. The supply follows market participants reporting firmer buying interest for HVO as a marine fuel from ferry lines in the Mediterranean in recent sessions. The supplied HVO is said to be of class II, with used cooking oil (UCO) as the feedstock. Cepsa added that the supply was completed in cooperation with Bunker Holding subsidiary Glander International Bunkering, and could bring about a greenhouse gas (GHG) emissions reduction of up to 90pc compared with conventional fuel oil. Cepsa will also look to obtain capability to supply marine biodiesel blends exceeding 25pc biodiesel content by the end of the year, delegates heard at the International Bunker Conference (IBC) 2024 in Norway. This also follows plans by Cepsa to build a 500,000 t/yr HVO plant in Huelva , set to start production in the first half of 2026. Argus assessed the price of class II HVO on a fob Amsterdam-Rotterdam-Antwerp (ARA) basis at an average of $1,765.54/t in April so far, a premium of $906.41/t to marine gasoil (MGO) dob Algeciras prices in the same month. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more