05-11-2016

Asia Fuel Oil-Robust demand extends 380-cst cash, ex-wharf premiums

Asiafuelo

Cash and ex-wharf premiums of Asia’s 380-cst fuel oil extended their gains on Friday after eager buyers scrambled to secure cargoes, traders said.

Cash premiums for 380-cst fuel oil rose 54 cents to $2.82 a tonne to Singapore quotes, its highest since March 23 during the last week of the so-called March bull play.

Over the past week, cash premiums for 380-cst fuel have more than doubled, rising by $1.74 from last Friday’s $1.08 a tonne to Singapore quotes.

The sharp rise in cash premiums was attributed to a lack of prompt supplies stemming from limited cutter stocks, the emergence of off-spec cargoes, congestion at some of Singapore’s fuel oil terminals and robust demand, industry sources said.

Five cash deals were reported in the Platts window on Friday totalling 140,000 tonnes of the 380-cst fuel oil, the highest daily traded volume since Sept. 14, data compiled by Reuters showed.

PetroChina bought 80,000 tonnes of the fuel through two cargoes from Vitol and Total for prompt delivery between Nov. 19-23 at a premium of $3 a tonne to Singapore quotes.

Coastal also bought two cargoes of 380-cst from Mercuria and Glencore totalling 40,000 tonnes for delivery at the far end of the trading window between Nov. 30 and Dec. 4 at a premium of about $3 a tonne to Singapore quotes.

Hin Leong bought the fifth 20,000 tonne cargo from Koch for delivery between Nov. 28 and Dec. 2 for the equivalent of about $1.85 a tonne above Singapore quotes.

Spot ex-wharf premiums also rose to their highest since mid-September of $3.51 a tonne to Singapore quotes after a limited number of suppliers were offering cargoes at elevated premiums, sources said. Ex-wharf premiums have gained $1.12 since last Friday’s settlement of $2.39 a tonne to Singapore quotes.

However, industry sources pointed out that further dated ex-wharf premiums were being offered at lower premiums to spot, indicating that supplies were not expected to remain tight over the next month.

SINGAPORE CASH TRADES: Five cash deals reported. For further details, please see

 FUEL OIL                                                                                 
 CASH ($/T)                 ASIA CLOSE      Change   % Change   Prev       RIC
                                                                Close      
 Cargo - 180cst                     271.24     0.52       0.19     270.72  FO180-SIN
 Diff - 180cst                        2.69     0.34      14.47       2.35  FO180-SIN-DIF
 Cargo - 380cst                     263.74     1.07       0.41     262.67  FO380-SIN
 Diff - 380cst                        2.82     0.54      23.68       2.28  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          267.25     1.25       0.47     266.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium            3.51     0.18       5.41       3.33

Source: Reuters

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