LSMGO price moves closer to VLSFO in Singapore
The premium of LSMGO over VLSFO at the port has dropped to its lowest point since November 2021 due to the limited availability of VLSFO.
Changes in Singapore prices since 1 September:
- VLSFO down by $29/mt, to $591/mt
- LSMGO down by $44/mt, to $622/mt
- LSMGO-VLSFO spread narrowed by $15/mt, to $31/mt
VLSFO availability in Singapore has become tighter, with lead times now extending up to 11 days. Prompt deliveries are still possible, but these stems are usually priced higher than those for dates further out, a source said.
Some suppliers are dealing with low VLSFO stock levels and barge loading delays, further tightening supply.
A shipping agent noted that some barges are facing product loading delays of up to three hours at oil terminals.
Meanwhile, LSMGO availability in Singapore remains sufficient amid weak bunker demand, which has contributed to a steeper price drop. Most suppliers recommend lead times of around eight days, but some can offer deliveries within just two days.
These factors have narrowed the LSMGO-VLSFO price difference in Singapore to average about $35/mt this month, a level not seen since November 2021. The LSMGO-VLSFO spread averaged around $84/mt last month.
Another source expects tight VLSFO supply to continue through the first half of September. This could keep the LSMGO-VLSFO spread narrow over the coming weeks.
By Tuhin Roy
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