Asia’s fuel oil markets were steady amid limited activity on Tuesday but continued to show signs of consolidation from which a deviation might soon emerge, industry sources said.
“The market has been consolidating and is primed for a breakout soon, probably to the downside if you ask me since the technicals are looking bearish,” said a Singapore-based trader.
“It’s still pretty quiet, most people are sitting out the Algiers meeting which is causing a lot of volatility,” said a Singapore-based broker.
The 380-cst front month Oct/Nov time spreads have traded in a tight range between plus $1 and plus $1.25 a tonne to Singapore quotes over the past four sessions. On Tuesday, the 380-cst Oct/Nov time spreads slipped 25 cents to $1 a tonne above Singapore quotes.
The front month 180-cst fuel oil crack to Dubai crude traded at a discount of minus $3.74 a barrel, the bottom end of the past eight days’ trading range of minus $3.22 to minus $3.74 a barrel.
Cracks of the 180-cst fuel slipped 42 cents a barrel on Tuesday in response to Monday’s increase in crude oil prices, industry sources said.
On Sept. 20, refining margins for Asia’s 180-cst fuel oil were at their narrowest in about eight months, boosted by firm demand for the industrial fuel as well as shrinking inventories in key storage hubs.
In terms of market fundamentals, however, near-term prospects seem more supportive.
“Supplies over the next couple of months are on the thin side which should support the market, especially when you take into consideration that demand is still pretty good,” another Singapore trader said.
– Saudi Arabia and Iran on Tuesday dashed hopes that OPEC oil producers could clinch an output-limiting deal in Algeria this week as sources within the exporter group said the differences between the kingdom and Tehran remained too wide.
– Saudi Arabia will cut ministers’ salaries by 20 percent and scale back financial perks for public sector employees in one of the most drastic measures yet by the energy-rich kingdom to save money at a time of low oil prices.
– Russian oil majors Rosneft and Gazprom Neft are raising the share of production from hard-to-recover reserves, to counter declining conventional output, showing the complexities facing producer nations seeking to tackle a global oversupply of crude.
SINGAPORE CASH TRADES: Three cash deals reported. For further details, please see
FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev RIC Close Cargo - 180cst 258.30 2.19 0.86 256.11 FO180-SIN Diff - 180cst 1.95 0.05 2.63 1.90 FO180-SIN-DIF Cargo - 380cst 251.19 2.24 0.90 248.95 FO380-SIN Diff - 380cst 0.61 0.03 5.17 0.58 FO380-SIN-DIF Bunker (Ex-wharf)- 380cst 254.19 2.74 1.09 251.45 BK380-B-SIN Bunker (Ex-wharf) Premium 3.00 0.50 20.00 2.50
Source: ReutersPrevious Next