Singapore (Platts)--22Feb2011/512 am EST/1012 GMT

Delivered 380 CST bunker fuel differential in Fujairah, against Middle East 180 CST high sulfur fuel oil cargo values, fell $5/mt late Monday to a two-week low of $25.90/mt, Platts data showed.

The differential, which was above the $30/mt mark in the last eight straight trading sessions, hitting a 30-month high of $38.11/mt on February 2, fell off the recent highs seen amid the persistent climb in Western crude markers as buyers look for cheaper marine fuel from neighboring ports.

"We are now lifting [buying delivered bunker fuel] at Gibraltar and Malta due to non-availability at Fujairah. Perhaps we may lift from Singapore," a regular buyer of bunker fuel in Fujairah said.

On Monday, Platts assessed delivered 380 CST bunker fuel in Gibraltar and Malta at $583-585/mt and $588-590/mt respectively. Platts had assessed the grade up $1.50/mt at $614-615/mt in Singapore, about $9/mt below Fujairah's $623-624/mt for the same grade.

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Some suppliers in Fujairah have limited supplies as they have yet to receive replenishment cargoes, industry sources said, and these are obvious given their much higher offers and inability to offer prompt material.

On Monday, a supplier was heard to have offered $640/mt for a clip of delivered 380 CST at Fujairah but this was subject to availability, while Fal Oil was said to have offered $645/mt for delivery from March 1.

A shipowner looking to buy a clip of delivered 380 CST from Fujairah for delivery on the last day of February said that Fal had turned down his inquiry.

"Fal could not offer. Delivery end February [is] too prompt for it," he said. It is not immediately clear if the shipowner has already fulfilled his requirement but he had told Platts his best offer was $622/mt. The best offer Platts heard for prompt delivery was $624/mt.

Fal used to account for around 50% of the Fujairah bunker market, which sees sales of around just under 1 million mt every month, but stopped offering bunker fuel on a spot basis in February and will only resume in March.

Fal's absence caused premiums to climb steeply which might lead to a fall in demand, observers said.

"When Fal is not around, everyone has got a [bigger] share of the market," a market participant close to the situation in Fujairah said.

Since Fal stopped [offering spot bunker fuel in Fujairah, bunker premium has been higher, he said. "Maybe buyers will choose to take [bunker fuel from] another port, thus volume is also slightly lower," he added. --Norazlina Juma'at, nora_jumaat@platts.com