Asia Fuel Oil-Time spreads slip despite decline in inventories


The front-month time spreads of the Singapore 380-cst fuel oil edged lower on Thursday, despite a moderate decline in Singapore fuel oil stocks, as traders cashed in their bullish positions due to the month end, traders said.

“It’s the end of the month and some of the bullish positions need to be closed given the bull story that’s been circulating around recently because of tighter supplies,” said a Singapore-based trader.

The front-month Oct/Nov time spreads for the 380-cst fuel oil was 30 cents lower on Thursday at 70 cents a tonne to Singapore quotes on the Intercontinental Exchange (ICE) by 17:15 Singapore time (0915 GMT), industry sources said.

The further dated Nov/Dec time spreads were also trading lower at 25 cents a tonne to Singapore quotes on ICE, down by 10 cents from the previous session.

There was a weaker backwardated market structure despite a 1.3 percent drop in Singapore’s fuel oil inventories when many industry participants were anticipating a slight increase instead.

Onshore fuel oil stocks held by up to 13 oil and oil storage companies in Singapore slipped by 323,000 barrels (or about 48,000 tonnes) to a two-week low of 24.01 million barrels (3.58 million tonnes) in the week to Sept. 28, according to data from International Enterprise (IE) Singapore on Thursday.

In cash deals, Mercuria bought two 20,000 tonne cargoes of 380-cst fuel oil from Hin Leong at $257 and $256 a tonne for delivery between Oct. 14-18 and Oct. 19-23, industry sources said.

Although Mercuria has not placed any bids for the 380-cst fuel in the Platts window since Aug. 29 while actively offering 380-cst cargoes instead, one trader pointed out the deals price levels were “very good”.

    LATEST TENDERS & AWARDS: For further details, please see 
 OUTSTANDING ASIA/MIDEAST FUEL OIL                                 
 ISSUER               GRADE:            VOLUME:      DELIVERY      CLOSE (VALID)
 Taiwan/Formosa  S: 380cst max 4% S     40KT         Oct 13-15     Sept 30
 UAE/ADNOC       S: SRFO (Ruwais)       80KT         Oct 15-17     Oct 4 
 Thailand/IRPC   S: LCO (Rayong)        5KT          Oct 28-30     Sept 29
 India/Reliance  S: CBFS max 1.7% S     20KT         Oct 19-20     Sept 28 (Sept 29)
                 S: CBFS max 3% S       60KT         Oct 19-20     Sept 28 (Sept 29)
 Pakistan/PSO    B: 125cst HSFO         65KT x8      Nov 1-Dec 10  Oct 4 (Oct 14)
                                        65KT x10     Dec 11-Jan    Oct 4 (Oct 14)
                                        65KT x5      Jan 16-Feb    Oct 4 (Oct 14)
                 B: 120cst LSFO         60KT         Nov           Oct 4 (Oct 14) 
                                        60KT x2      Dec           Oct 4 (Oct 14)
                                        60KT         Jan           Oct 4 (Oct 14)
 ISSUER               GRADE:            VOLUME:      DELIVERY      RESULT
 India/IOC       B: 180cst LSFO 1% S    15KT         Nov 15-19     Glencore/ 180 MOPAG around +$65
                 (Mangalore)                                       CFR or FOB
 India/IOC       S: 380cst (Chennai)    35KT         Oct 22-24     Gunvor/ 380 MOPS & Argus Avg
 India/IOC       S: 380cst (Chennai)    35KT         Oct 14-16     Gulf Petrochem/ 380 MOPS & Argus
                                                                   Avg -$6-$7
 Thailand/IRPC   S: LCO (Rayong)        5KT          Sept 28-30    Chevron/ 180 MOPS +$80-90
 Sri             B: 180cst LSFO 1.8% S  25KT         Oct 12-13     Glencore/ 180 MOPS +$40-$50 DES
 Lanka/Ceypetco  (Muthurajawela)                                   
 India/IOC       S: 380cst (Chennai)    35KT         Oct 1-3       Gulf Petrochem/ 380 MOPS & Argus
                                                                   Avg -$6-$7
 Taiwan/Formosa  S: 280cst HSFO         40KT         Sept 16-18    Glencore/ 180 MOPS -$13-$14 FOB
 Taiwan/Formosa  S: 380cst max 4% S     40KT         Oct 1-3       PetroChina/ 180 MOPS -$15 FOB
    - It was a moment U.S. shale oil producers have been waiting on for more than two years: OPEC
nations finally agreed to cut production on Wednesday in a move that lifted low prices ravaging
their budgets.             
    - Oil buyers from China to India remained cautious as they await details of OPEC's agreement to
cut production for the first time since 2008 in order to reduce a global oversupply of crude.
    SINGAPORE CASH TRADES: Two cash deals reported. For further details, please see       

 FUEL OIL                                                                                 
 CASH ($/T)                 ASIA CLOSE      Change   % Change   Prev       RIC
 Cargo - 180cst                     264.71    11.44       4.52     253.27  FO180-SIN
 Diff - 180cst                        2.06     0.17       8.99       1.89  FO180-SIN-DIF
 Cargo - 380cst                     256.69    10.89       4.43     245.80  FO380-SIN
 Diff - 380cst                        0.09    -0.54     -85.71       0.63  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          259.69    10.89       4.38     248.80  BK380-B-SIN
 Bunker (Ex-wharf) Premium            3.00     0.00       0.00       3.00

Source: Reuters

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