27-07-2016

Asia Fuel Oil-380-cst time spreads widen on well-supplied market

AsiaFuel

The Singapore 380-cst prompt month time-spreads widened its contango structure on Tuesday, weighed down by steady near-term supplies, traders said.

“The near-term supply outlook isn’t looking as tight as people initially thought despite the lower arbitrage inflows,” one Singapore-based trader said.

While arbitrage volumes into Singapore have fallen for three consecutive months, the decline in inflows has been largely offset by vast stocks of fuel oil stored in tankers around the Singapore trading hub and has not led to any constraints.

Total fuel oil flows into East Asia for July have been provisionally pegged at 3.3 million to 3.6 million tonnes, below the year-to-date monthly average of 5.84 million tonnes, due to lower flows from the West and the Middle East, according to the latest assessment by Thomson Reuters Supply Chain and Commodities Research released on Thursday.

The Aug/Sept time spreads contract for the 380-cst fuel oil widened its contango structure by 25 cents from yesterday to minus $1.50 a tonne to Singapore quotes.

In the physical markets, 60,000 tonnes of benchmark 180-cst fuel oil was traded in the Platts window through two deals, alongside another two 380-cst fuel oil trades totalling 40,000 tonnes, industry sources said.

Vitol was the buyer of both 180-cst cargoes, taking 40,000 tonnes of the fuel from CCMA and 20,000 tonnes from Gunvor, each for delivery between Aug 10-14 and at a $1 discount to Singapore quotes.

Meanwhile, Glencore sold one 380-cst cargo to Coastal for $221 a tonne for delivery between Aug 21-25, after which PetroChina then bought the second 380-cst cargo from Coastal at a discount of $2 a tonne to Singapore quotes.

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                      228.57    -7.64     -3.23    236.21  FO180-SIN
 Diff - 180cst                        -0.46    -0.42   1050.00     -0.04  FO180-SIN-DIF
 Cargo - 380cst                      220.41    -6.99     -3.07    227.40  FO380-SIN
 Diff - 380cst                        -1.96     0.17     -7.98     -2.13  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst           222.41    -7.59     -3.30    230.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium             2.00    -0.60    -23.08      2.60

Source: Reuters 

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