Bunker fuel suppliers in Singapore have concluded ex-wharf term contracts for the first quarter of 2013 at premiums of between $1.50/mt and $3/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil cargo assessments, according to market sources Wednesday.

The levels were much weaker compared with the fourth quarter of 2012 when premiums were around $5.75-7/mt, reflecting the weaker market seen late in the year.

Premiums for physical bunker fuel are the prices buyers are willing to pay for oil over and above published benchmark values.

Market sentiment has remained weak, said several sellers, who saw little change in terms of volume traded for term contracts, although they declined to share specific figures.

November's bunker fuel sales volume hit a nine-month low of 3.25 million mt, falling 6.64% month-on-month, according to the latest data from the Maritime and Port Authority of Singapore data.

The last time the volume was this low was in February, when it hit a then two-year low of 3.09 mil mt.

The November total was also down 9.4% year-on-year, the data showed.

Cargo supply arrivals for January alone are expected to be around 5 million mt, with around half a million heading to the China market, said sources.

February supply is around 2.5 million mt to date, with a good amount of time left for more fixtures.

Spot premiums for the ex-wharf 380 CST have hovered around the $1-2.50/mt mark in recent weeks, reflecting the term market.

Source: Platts