08-07-2016

Asia Fuel Oil-Asian fuel oil spreads tighten further as buying continues

AsiaFuelO

Asian spreads for high sulphur fuel oil narrowed further on Thursday as buying interest continued amid a rebound in oil prices, traders said.

That came as official data showed onshore fuel oil stocks in Singapore STKRS-SIN reached a two-week high last week.

July-August time spreads for 380-centistoke high sulphur fuel narrowed to minus $1 per tonne on Thursday, against a discount of $1.25 on Tuesday. That is the narrowest since June 30, Reuters data showed.

The fuel oil market was closed in Singapore on Wednesday for a public holiday.

Brent futures nudged towards $50 a tonne after U.S. crude stocks fell for a seventh straight week.

Spreads for 180-cst fuel oil tightened to a discount of 75 cents on Thursday, the narrowest since June 29, and against minus $1.25 on Tuesday.

Fuel oil stocks in Asia’s leading ship refuelling hub climbed to 26.91 million barrels on July 6, up from 25.56 million barrels on June 29, according to data from International Enterprise (IE) Singapore.

Despite the rise in inventories “most of the traders and physical suppliers are not backing down on their asking prices,” said a Singapore-based trader. “Maybe they are expecting a price hike,” the trader added.

Fuel oil imports into Singapore slipped to 931,090 tonnes in the week to July 6, down from almost 1.14 million tonnes the previous week, official government data showed.

Four countries – Malaysia, Indonesia, the United States and Iran – supplied 782,934 tonnes of total imports. The biggest volumes came from Malaysia which supplied 263,307 tonnes and Indonesia with 234,783 tonnes.

More than 339,676 tonnes was exported, with China, Malaysia, Japan and Indonesia the largest recipients. Around 145,916 tonnes was exported to China and 104,638 tonnes to Malaysia, the data showed.

TENDERS:
Korea Western Power Co Ltd (WP) bought 45,000 tonnes of high sulphur fuel oil from Hyundai Corp for around $260 per tonne for
July delivery via a spot tender that closed on Wednesday, a source from the utility said.

SINGAPORE CASH TRADES: Three trades reported – PetroChina bought 20,000 tonnes of 380-cst high sulphur fuel KIB at a discount of $2.50 to average prices in August for delivery between July 22-26.

– Gunvor bought 20,000 tonnes of 380-cst high sulphur fuel oil from Mercuria at $249 per tonne for delivery between July 26-30.

– Mercuria bought 22,000 tonnes of 180-cst high sulphur fuel oil from Vitol at $253 per tonne for delivery between July 24-28.

 FUEL OIL                                                                          
 CASH ($/T)              ASIA CLOSE    Change   % Change  Prev      RIC
                                                          Close     
 Cargo - 180cst                253.25     5.79      2.34    247.46  FO180-SIN
 Diff - 180cst                  -2.09     0.05      2.34     -2.14  FO180-SIN-DIF
 Cargo - 380cst                249.01     5.77      2.37    243.24  FO380-SIN
 Diff - 380cst                  -2.00     0.00      0.00     -2.00  FO380-SIN-DIF
 Bunker (Ex-wharf)-            250.74     6.50      2.66    244.24  BK380-B-SIN
 380cst                                                             
 Bunker (Ex-wharf)               1.73     0.73     73.00      1.00

Source: Reuters 

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