The Singapore high sulfur fuel oil viscosity spread between 180 CST and 380 CST has been at its widest in eight months over the last three trading sessions during the Platts Market on Close assessment process, S&P Global Platts data showed.
As of Wednesday's close, the spread was at $7.63/mt, while on Tuesday, the spread was at $7.33/mt. On Monday, the spread was at $7.76/mt.
This compares to the period over the first week of June last year, when it was wider at $8.32/mt on June 7.
Market sentiment is varied on the fundamentals which have resulted in the wider spread, with one trader saying "it has been undervalued for a long time, so the market is simply rebalancing to reflect what it should be."
Others noted that there have been a lot of high viscosity supply flowing into Asia, with Venezuela having resumed some exports which are typically high viscosity as well.
On the bunker market front, there has been more high viscosity supply available, with the ex-wharf 500 CST selling in the spot market at a discount of around $3-$3.50/mt to the Mean of Platts Singapore 380 CST HSFO assessments.
In comparison, February ex-wharf term contracts for the same grade were concluded at discounts of around $1.50/mt, Platts reported previously.
For March, the market is expecting more than 1 million mt of high viscosity supply, a touch higher than the usual 500,000 mt to 1 million mt, traders said.
The lack of cutterstocks in the market has also lent support to the 180 CST cash differential with Wednesday's close at a premium of 64 cents/mt, the highest it has been since January 24 when it was at a premium of $1.25/mt, Platts data showed.
