Strength in prices of high-sulfur fuel oil (HSFO) has taken traders by surprise, given poor demand. But fuel oil's discount to Brent crude remains narrow, implying that prices could be heading for a fall. Right now, the only real source of demand for fuel oil up to 3.5% sulfur content is Asia, primarily Singapore, given that it is a key bunker market and has available storage. But low prices have shaved any margins to be made from moving fuel oil to the citystate. Indeed, a source at a major tells International Oil Daily: "Our Singapore office is not very excited about us sending fuel oil over."
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