06-07-2016

Asia Fuel Oil-380-cst prompt contango narrows on more buying interest

asiafuel

The front month July-August time spread for 380-cst fuel oil narrowed its contango on Tuesday in renewed buying interest, traders said.

The 380-cst July-August time spreads discount was 50 cents narrower at minus $1.25 a tonne to Singapore quotes, Thomson Reuters data showed.

The front month viscosity spread, the price difference between 180-cst and 380-cst swaps, continued to come off its recent high and settled at $5 a tonne on Tuesday. On Friday, the spread was at $7 a tonne, its highest since Oct. 15.

In the physical market, two cash deals were fixed in the Platts window totalling 40,000 tonnes of 180-cst fuel oil. Tuesday’s deals were done at a wider discount of minus $2 to minus $2.50 a tonne to Singapore quotes, compared to the last time the 180-cst fuel traded at minus $1 a tonne on Friday.

Traders said that Mercuria was active in both seeking and offering 380-cst in the window. Mercuria’s offers for 380-cst fuel were most aggressive at minus $2 a tonne, compared to offers from Glencore, Repsol and Gunvor that ranged between a discount of 75 cents a tonne to parity to Singapore quotes, sources said.

Mercuria was also most aggressive in seeking 380-cst fuel oil after having placed bids at a discount of $5 a tonne to Singapore quotes across the assessment window, compared to others that bid in the range of about minus $2.25 to minus $4.30 a tonne to Singapore quotes, trade sources said.

Cash discounts for benchmark 180-cst fuel oil FO180-SIN-DIF were 42 cents lower to minus $2.14 a tonne to Singapore quotes while 380-cst cash discounts FO380-SIN-DIF edged 5 cents lower to minus $2 a tonne to Singapore quotes.

RELATED NEWS:
– Crisis-struck Venezuela is sending two supertankers filled with fuel oil across the oceans to Singapore, in what traders described as a surprise move that could help ease a tight market.

– Oil fell below $50 a barrel on Tuesday as concern about a potential slowdown in economic growth that would sap demand trumped supply outages in Nigeria and other exporting nations.

– Shipping Corporation of India (SCI) will resume sailing to Iran this month after a four-year gap, transporting an oil cargo for a state-run refiner, the chairman of India’s biggest shipping company said on Tuesday.

SINGAPORE CASH DEALS – Two cash deals reported. For further details, please see

 FUEL OIL                                                                                
 CASH ($/T)                  ASIA CLOSE      Change   % Change  Prev      RIC
                                                                Close     
 Cargo - 180cst                      247.46    -9.22     -3.59    256.68  FO180-SIN
 Diff - 180cst                        -2.14    -0.42     24.42     -1.72  FO180-SIN-DIF
 Cargo - 380cst                      243.24    -6.93     -2.77    250.17  FO380-SIN
 Diff - 380cst                        -2.00     0.05     -2.44     -2.05  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst           244.24    -6.63     -2.64    250.87  BK380-B-SIN
 Bunker (Ex-wharf) Premium             1.00     0.30     42.86      0.70

Source: Reuters 

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