20-07-2016

Asia Fuel Oil-380-cst ex-wharf slips but still at premium

asiafuel

Spot ex-wharf price differentials of Asia’s 380-cst fuel oil came off the 11-week high seen last Friday but were still at a premium to
Singapore quotes, while cargo cash differentials of the benchmark 180-cst and the 380-cst fuel oil slipped on Monday as buying interest waned.

Spot ex-wharf premiums fell to $1.20 a tonne to Singapore quotes on Monday, down by $1.30 from its previous close.

In the Platts window, buying interest for 380-cst was weaker as the number of offers outnumbered bids for physical cargoes by a little over 3 to 1 resulting in only one deal being reported for the 380-cst fuel, industry sources said.

“It’s not surprise ex-wharf came down today since selling into that market fetches a greater premium than the cargo market which is at a discount now,” said one Singapore-based trader.

“But it is odd that there were so many offers in the window, when supplies in July were considered to be a lot tighter. Maybe suppliers are looking for outlets,” the trader said.

“People are getting anxious waiting for that ‘tightness’ to materialize,” said another Singapore-based trader.

No deals for the 180-cst fuel oil exchanged hands in the Platts window on Monday with only one bid and one offer made, both by Vitol, sources said.

Cash discounts for 380-cst FO380-SIN-DIF widened by 8 cents to $1.60 a tonne to Singapore quotes, while cash premiums for 180-cst fuel FO180-SIN-DIF narrowed by 13 cents to 9 cents a tonne to Singapore quotes.

TENDERS:
– Bangladesh Petroleum Corp (BPC) has issued its first tender to buy fuel oil, in a move from direct-term deals with suppliers, as it opens its purchasing contracts.

The company is seeking a total of 160,000 tonnes of 180-cst high sulphur fuel oil through eight deliveries from August through to December. The tender closes on July 20 and is valid for 75 days, the tender document showed.

RELATED NEWS:
– An Iranian crude cargo loaded by trading house Trafigura is set to arrive in east China this week, heating up the race among oil suppliers to meet the rise in demand for imports from China’s independent refineries, trade sources said.

– North Dakota’s oil output rose in May, a surprising increase due to crude prices that inched up during the month, helping to reverse five months of production declines.

– Saudi Arabia’s energy minister said on Sunday the kingdom always reacts to oil market supply and demand and it would continue to monitor crude markets for any developments.

SINGAPORE CASH DEALS – One cash deal reported. For further details, please see

 FUEL OIL                                                                                
 CASH ($/T)                 ASIA CLOSE       Change   % Change  Prev      RIC
                                                                Close     
 Cargo - 180cst                      249.14     2.58      1.05    246.56  FO180-SIN
 Diff - 180cst                         0.09    -0.13    -59.09      0.22  FO180-SIN-DIF
 Cargo - 380cst                      242.43     3.29      1.38    239.14  FO380-SIN
 Diff - 380cst                        -1.60    -0.08      5.26     -1.52  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst           243.63     1.99      0.82    241.64  BK380-B-SIN
 Bunker (Ex-wharf) Premium             1.20    -1.30    -52.00      2.50

Source: Reuters

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