Singapore’s fuel oil refining margins narrowed their discount to Dubai crude on Thursday, lifted by firm demand for bunker fuels, a decline in onshore inventory levels in the city state and a drop in Asian supplies as regional refinery maintenance kicks into gear, industry sources said. “Stronger demand appears to have been supporting the Singapore fuel oil 380-cst crack (to Dubai crude), which has been trading above negative $6 a barrel since early February,” Dutch bank ING said in a research note.
Singapore refining margins of 380-cst fuel to Brent crude for April on the Intercontinental Exchange (ICE) were about minus $8.70 a barrel by 1830 Singapore time (1030 GMT) on Thursday, compared with about minus $9 in the previous session, trade sources said. This came as official data showed that onshore fuel oil inventories in Singapore had dropped 3 pct, or 120,000 tonnes, in the week to March 15, having reached the highest level in nearly eight months, at 4.14 million tonnes, the previous week. Net fuel oil imports into Singapore had plunged 34 percent from the previous week to a two-week low of 895,000 tonnes.
While the inventory build came as a surprise to some traders on the back of a persistent wave of arbitrage volumes into Singapore throughout March, they maintained their expectations of further stock increases in the coming weeks. “We’ll get big builds next week unless (buyers) move their Platts liftings offshore,” one Singapore-based fuel oil trader said, referring to elevated trade of physical cargoes in the Platts window since the start of March. Earlier in the week official data also showed that Singapore marine fuel sales volumes in February hit a record high for the month, rising 10 percent year on year to 3.846 million tonnes.
The record monthly sales volumes were also a surprise to some traders because seasonal factors, including slow shipping activity, typically make for low February marine fuels sales in Singapore.
– Saudi Arabia’s King Salman oversaw the signing of deals with China worth a potential $65 billion on the first day of a visit to Beijing on Thursday as the world’s largest oil exporter looks to cement ties with the world’s second-largest economy.
– The new head of Indonesian state energy firm Pertamina said he would focus on improving transparency and communications at the country’s biggest company in tandem with efforts to boost energy security.
FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev RIC Close Cargo - 180cst 298.50 7.25 2.49 291.25 FO180-SIN Diff - 180cst -0.82 0.18 -18.00 -1.00 FO180-SIN-DIF Cargo - 380cst 291.86 7.21 2.53 284.65 FO380-SIN Diff - 380cst -1.19 0.26 -17.93 -1.45 FO380-SIN-DIF Bunker (Ex-wharf)- 380cst 293.50 6.50 2.26 287.00 BK380-B-SIN Bunker (Ex-wharf) Premium 1.64 -0.71 -30.21 2.35
Source: ReutersPrevious Next
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