The Fujairah-Singapore delivered bunker fuel spread narrowed to minus $1/mt from minus $7/mt last Friday, S&P Global Platts data showed.
The spread is typically in the range of minus $6-minus $15/mt, and has narrowed this week as spot bunker fuel cargoes for delivery to Fujairah were tight due to inclement weather, trade sources said.
Offers for delivered bunker fuel to Fujairah were heard at around $393-$394/mt Thursday, mostly from February 5 onwards.
A week ago, spot cargoes at the port were being offered at $387-$388/mt for prompt delivery.
One supplier said his bunker fuel cargo that was supposed to arrive last weekend had been delayed and he could only offer product from Monday.
Another supplier said the inclement weather was not the only reason for the tight availability in Fujairah. “In general, oil has been tight and suppliers fully booked, he added.
In addition, demand for bunker fuel in Fujairah has doubled to around 20,000-30,000 mt/day this year from 10,000-15,000 mt/day in the second half of 2017, trade sources said.
Demand in Fujairah dipped significantly in H2 last year after the UAE barred entry to vessels carrying Qatari flags or en route to Qatari ports — as did Saudi Arabia, Bahrain and Egypt — during a diplomatic row.
That meant Qatargas and RasGas vessels that had earlier sourced 150,000-180,000 mt/month of bunker fuel in Fujairah had to head to Gibraltar or Singapore for supply.
With Pakistan now imposing restrictions on fuel oil imports and increasingly buying LNG instead, trade sources estimate demand in Fujairah to be around 600,000-750,000 mt/month at present, still down from 800,000-900,000 mt/month in the first half of 2017.