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Suppliers offload higher sulphur fuels in preparation for new IMO ruling

ExxonMobil has offered to sell 120,000 tons of high-viscosity fuel oil from its Singapore refinery. The company had been offering large volumes of its Singapore-produced fuel oil since July and the 120,000 tons is by far the biggest volume. Traders predict that ExxonMobil will be unloading more of the fuel produced in Singapore because it has higher sulphur levels than the new bunker specifications allow. The new ruling, set by the International Maritime Organization (IMO) which provides for the reduction of the maximum sulphur levels in marine fuels to 3.5%, will take effect on January 1, 2012. But Singaporeโ€™s Maritime Port Authority which is tasked with the regulation of its marine fuels industry has asked bunker suppliers based in the country to comply with the new ruling as early as December 1, 2011. ExxonMobil is the largest supplier of 500 cst to Singaporeโ€™s marine fuels market, which accounts for about 15% of its monthly volumes. The demand for high viscosity fuels has grown steadily over the past five years, and went up dramatically in August, but after the two-month high, demand has eased and is now back to its pre-spike level. (November 30, 2011)