Spot prices fell by $2.00-$3.00 per tonne overnight to $58.00-$60.00 following a Singapore trader's much anticipated entrance with an aggressive offer at $60.00 for 20,000 tonnes of 180-centistoke (cst) loading Aug 11-15.

The trader's offer didn't stir any bids.

Sources said the trader was seen to be loading at least four Iranian cargoes from mid-July onward - a bearish hint - which could send prices reeling further South.

"When the trader came out with an offer like that, buyers just backed off," one trader said, adding that the exit of buyers encouraged the seller to offer the market down further.

The general consensus was that there is plenty of high sulphur fuel oil from the Middle East heading towards Singapore, a fundamental weakness which the market hasn'T quite shaken off, traders said. "The market will have tomove lower as there is a lot of material coming this way," noted one trader.

And this is not helped by regional demand becoming increasingly slack and additional supplies pouring in because of the unexpected shut down of secondary units.

Among the unforeseen shutdowns include Shell Singapore's 40,000 barrel-per-day (bpd) hyrocracker for about two weeks, due up this weekend and Singapore Refining Co's 39,000-bpd residual fluid catalytic cracker for about two months, due up mid-August.

"The question now is, where can these cargoes go?" asked a trader.

"We are really lacking in storage space right now."

Singapore's weekly residues stocks rose by 1.04 million barrels to a high 11.341 million barrels, for the period July 9 to July 15, Trade Development Board figures released on Thursday showed.

The paper market was also under pressure, indicative of the overall loss of confidence in the physical market, traders said. August paper was last indicated at $61.00/$61.75 per tonne, even though up by 25 centsfrom Thursday but still sharply down by $3.00 from Wednesday's quoted levels.

September was talked at $63.25/$64.25, reflecting a deep contango.

Most market participants were, however, mixed about the lowest level it will hit before consolidating, or even rebounding.

Some traders said they see the bottom to be at $55.00-$56.00 level, while others peg the level much lower at $50.00.

"This market's heading nowhere, but down, I'm Afraid," said one trading manager, adding that it takes the market to be demand-driven before it can March up.

Failure of key regional buyers like China, Indonesia and Thailand from helping to rescue the current saturated spot market has hurt sentiment even more, trade sources said.

"When the prices have fallen low enough for them, then we may see something out of China," said a trader.

Little relief was seen from Taiwan's latest issuance of a tender to buy August low sulphur fuel oil on Thursday, which sought the regular 38,000 tonnes for that month.