The Singapore 380-cst fuel oil cash markets recovered slightly from Friday’s loses on Monday but buyer sentiment remained relatively weak despite expectations of tightening near term supplies due to fewer Western arbitrage arrivals into East Asia, three traders said.
“Seems some of the trading houses aren’t that much into the idea that the low arbitrage flows will lead to tighter supply-demand balance,” said one Singapore-based trader.
While the four trades totalling 80,000 tonnes of 380-cst fuel oil reported in the Platts window on Monday were executed at a similar price range as Friday’s two deals, between $2 and $2.50 a tonne below Singapore quotes, the buy-sell gap broadened on Monday following wider bids and narrower offers compared to Friday, industry sources said.
Cash discounts for the 380-cst fuel oil were 29 cents narrower at $2.05 a tonne below Singapore quotes.
In the futures market, front month July-August time spreads narrowed their contango structure by 25 cents from the previous close to $1.75 a tonne below Singapore quotes.
In futures trading, a narrowing contango suggests excess supply is being reduced as the price of a commodity for immediate delivery strengthens relative to future prices.
On the Intercontinental Exchange (ICE), trading volumes of the 380-cst time spreads were particularly thin at the start of the week with only single-digit lots of the July-August spreads contract exchanging hands by the end of Asia trading hours, said another Singapore trader.
TENDERS & AWARDS:
– Taiwan’s state-owned energy company, CPC Corporation, issued a tender seeking 40,000 tonnes of low-sulphur fuel oil for delivery in August.
The tender close on June 30.
– China’s government has granted oil-product export quotas for the third round of 2016 that are 79 percent higher than a year ago.
– China National Offshore Oil Company, or CNOOC, has started operating an upgraded refinery project in eastern China following a 13-billion yuan ($1.95 billion) revamp programme, which will enable the plant to produce premium-quality fuel and high-value petrochemicals, according to a company official and state media report.
– Loadings of West Africa oil heading for Asia are set to edge higher in July, supported by firm demand for Angolan oil from China and India, a Reuters survey of shipping fixtures and traders showed.
– The energy minister of Saudi Arabia, the world’s largest oil exporter, and the secretary general of OPEC agree that the global oil market is heading toward a balance and that prices are starting to settle, according to comments carried by Saudi state news agency SPA.
SINGAPORE CASH DEALS – Four cash deals reported. For further details, please see
FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev RIC Close Cargo - 180cst 256.68 3.76 1.49 252.92 FO180-SIN Diff - 180cst -1.72 -0.39 29.32 -1.33 FO180-SIN-DIF Cargo - 380cst 250.17 5.49 2.24 244.68 FO380-SIN Diff - 380cst -2.05 0.29 -12.39 -2.34 FO380-SIN-DIF Bunker (Ex-wharf)- 380cst 250.87 5.79 2.36 245.08 BK380-B-SIN Bunker (Ex-wharf) Premium 0.70 0.30 75.00 0.40
Source: ReutersPrevious Next