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Asia Fuel Oil-380-cst cash premiums nudge higher as trade liquidity returns

Buying interest for physical cargoes of 380-cst high-sulphur fuel oil (HSFO) intensified on Tuesday, after muted trade in the previous two sessions, lifting cash premiums of the fuel to a three-session high.

The 380-cst fuel oil cash premium jumped to $4.90 a tonne to Singapore quotes, up from $4.66 a tonne on Monday and up from a near three-month low of $4.25 a tonne on Friday.

By contrast, trade activity in the paper market was muted, with time spreads and 380-cst barge crack values near their previous close, broker sources said.

– Eight cargo trades were reported in the Singapore trading window, totalling 160,000 tonnes of 380-cst high-sulphur fuel oil (HSFO).

– Trafigura bought all eight cargoes, lifting four from Gunvor and two each from Vitol and Mercuria.

– Trafigura resumed its trade in physical HSFO cargoes in the Singapore window after not having bought any cargoes in the two previous sessions.

– With the exception of the two previous sessions, trade activity for physical fuel oil cargoes in the Singapore window has spiked with daily trade volumes ranging between 120,000-360,000 tonnes per day. Trade volumes in the two previous sessions fell to 20,000 tonnes per day.

– A total of 980,000 tonnes of HSFO cargoes have traded in the window in the first week of December, up from a total of 760,000 tonnes in the whole of November.

– Kuwait’s KPC sold up to 80,000 tonnes of 380-cst fuel oil with a maximum 4.2 percent sulphur content for Dec. 19-20 loading to Vitol at an unknown price.

– Taiwan’s Formosa sold a 40,000 tonne cargo of 380-cst fuel oil with a maximum 3.5 percent sulphur content loading on Dec. 19-20 from Mailiao to Vitol at an unknown price.

– Russia plans to cut its oil output by at least 50,000 to 60,000 barrels per day (bpd) in January, its energy minister said on Tuesday, much less than its target under a global production deal reached last week.

– This would mean Russian oil output coming in at around 11.35 million bpd next month, off the post Soviet-record high of 11.41 million bpd reached in October and down from 11.37 million bpd last month.

– Energy Minister Alexander Novak reiterated to reporters that the country planned to cut its oil output gradually.
Source: Reuters

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