Singapore 380 CST bunker fuel term contracts for November have been concluded at premiums of $6.00-6.50/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments on an ex-wharf basis, a 12-month high for a monthly term contract, market sources said Tuesday.

The last time a monthly term contract was this high was for October last year when prices were similarly around $5-6.50/mt.

Offers this week are still around $5.50-7.50/mt, sources said.

This is also a significant bullish turn for market sentiment after October contracts which were concluded at premiums of $1-1.50/mt.

Since October last year, term contracts concluded on a monthly basis have moved between discounts of 50 cents to a premium of $5/mt to MOPS 380 CST HSFO assessments, Platts data showed.

The bullish market sentiment stems from the high volume fuel oil physical cargo trading, in which about 3.015 million mt of Singapore 380 CST HSFO changed hands on the Platts Market on Close assessment process in October alone.

Some ex-wharf sellers are completely out of any 380 CST to offer for November term contracts and are instead looking to buy, they said.

Incoming supply for November is estimated to be around 4 million-4.5 million mt, while December supply to date is estimated around 2 million-3.5 million mt, trade sources said.

November cargoes are expected to consist of 50% ready grade for the bunker market, about 25% of high density and high viscosity fuel, and the remaining 25% to be of low-sulfur, straight-run quality.

Trade sources also expect about 1 million mt to be re-exported to China, at this point.

The well supported Singapore market has also encouraged more cargoes to head this way, from the Middle East, which has deprived the UAE port of Fujairah of oil cargoes in mid-October, trade sources said.

Singapore's demand in September, according to the most recent figures available from the Maritime and Port Authority of Singapore, was around 3.61 million mt, up up 3.5% from August and up 8.5% year on year.

While sellers were pleasantly surprised at the increase, given low spot demand in September, this has bolstered the prospect of higher demand for the rest of 2013, with the festive season coming up, sources said.

Spot market premiums have hovered around the $6.00-8.50/mt mark in recent days.