Time-spreads of Asia’s fuel oil were slightly lower on Thursday but market fundamentals remained bullish given tight supplies of on-specification fuel oil and firm demand, traders said.
“Spreads were a bit softer today compared to the past few days but (traded) volumes were relatively low,” said a Singapore-based fuel oil trader, describing supply and demand fundamentals as stubbornly strong.
Premiums of the 380-cst Jan/Feb time spreads were 20 cents a tonne lower from the previous session to $2.05 a tonne on the Intercontinental Exchange (ICE) by 1800 Singapore time (1000 GMT), industry sources said.
The Feb/March time spreads of the 380-cst fuel were trading at a $1.15 a tonne premium, lower by 10 cents a tonne from the previous session.
This came as onshore inventories of Singapore fuel oil fell for a third consecutive week, slipping by 116,000 barrels (about 15,000 tonnes) in the week to Dec. 7 to a total of 22.21 million barrels (or 2.96 million tonnes).
Despite the arbitrage window being open since the start of November, traders said tightening Western supplies of the residual fuel have contributed to the decline of Singapore fuel oil inventories which are now at a one month low.
Traders also said congestion at some of Singapore’s fuel oil terminals weighed on last week’s inventory levels because incoming vessels had to wait before discharging their cargoes.
– China’s small, independent refiners are set to raise their crude oil imports again in 2017 on expectations that Beijing will keep their intake quotas steady, market participants said, a move that should help eat up some of the global supply glut.
– Russia said on Wednesday it sold a stake in oil giant Rosneft ROSN.MM for 10.5 billion euros ($11.3 billion) to Qatar and commodities trader Glencore GLEN.L, confounding expectations that the Kremlin’s standoff with the West would scare off major investors.
SINGAPORE CASH TRADES: Four cash deals reported. For further details, please see
FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev RIC Close Cargo - 180cst 314.75 -4.77 -1.49 319.52 FO180-SIN Diff - 180cst 2.92 -0.14 -4.58 3.06 FO180-SIN-DIF Cargo - 380cst 308.07 -3.75 -1.20 311.82 FO380-SIN Diff - 380cst 2.76 -0.12 -4.17 2.88 FO380-SIN-DIF Bunker (Ex-wharf)- 380cst 312.00 -3.00 -0.95 315.00 BK380-B-SIN Bunker (Ex-wharf) Premium 3.93 0.75 23.58 3.18
Source: ReutersPrevious Next