Singapore bunker fuel sellers are well prepared to face any congestion at the port terminals due to a recent surge in spot buying of 180 CST high sulfur fuel oil cargoes loading out of the city-state, trading sources said.

Since the beginning of this month, a total of around 2.5 million mt of 180 CST HSFO has been bought off the spot market during the Platts Market on Close assessment process. The cargoes are for loading over June 18-July 25, Platts data showed.

As such, berthing schedules are expected to be tight at some terminals in Singapore including Universal Terminal and Oiltanking where many of the top fuel oil sellers, like Vitol, and buyers like PetroChina and Glencore, have storage tanks, sources said.

Top 180 CST HSFO sellers during the MOC in June include Vitol, which has sold 723,000 mt of the grade till Tuesday, and Lukoil and Gunvor which have sold 520,000 mt and 500,000 mt, respectively, of the grade so far this month, Platts data showed. Top buyers during MOC in June include BP with 1 million mt, Glencore with 840,000 mt and PetroChina with 560,000 mt so far this month.

But most market participants said that so far the impact had not been felt and tightness was "manageable."

"Universal Terminal has nine small berths that can be used by barges carrying bunker fuel oil," one source said. "Universal Terminal should be able to handle the bunker barge traffic, provided sellers have oil at Universal Terminal," one seller said.

One supplier said that some impact was expected in the weeks to come, but added, they "were prepared."

Bunker fuel buyers also expect delivery schedules to be tight and are trying to load their cargoes at various terminals so as to limit the impact. "Buyers are asking for specific terminals. I do have some buyers spreading out loading terminals to avoid getting hit," an ex-wharf 380 CST bunker fuel seller said. "We are already spreading our purchases to less affected terminals ... like VOPAK, TG Penjuru, Helios, Horizon," an ex-wharf 380 CST bunker fuel buyer said.

The impact on bunker fuel prices is also expected to be limited, said sources. "Many suppliers in Singapore are chartering barges and they need to keep those barges running despite high premiums. Unless demand [for bunker fuel] increases, suppliers will compete aggressively for orders [from ship owners]," a source said.