Cash discounts and term ex-wharf premiums in Asia’s fuel market fell on Tuesday as suppliers continued placed aggressive offers to clear stocks.
Total fuel oil flows into East Asia for March are expected to close around 7.5 million tonnes for a third consecutive month, with about 7.2-7.3 million tonnes assessed so far, as cargoes continue to flow unabated, assessments by Thomson Reuters Oil Research showed on
Traders said there would need to be a meaningful draw in inventories before sentiment and price levels improved.
A total of 60,000 tonnes of the 380-cst fuel were traded in the Platts window on Tuesday through three deals along with another one trade in the 180-cst fuel totalling 20,000 tonnes, industry sources said.
Cash discounts of the two fuel grades widened to near eight-month lows as ample supplies and limited buying interest weighed, traders said.
Discounts of the 380-cst fuel FO380-SIN-DIF slipped to $1.59 a tonne to Singapore quotes, down 7 cents a tonne from the previous session, their lowest since Aug. 3.
Discounts of the less actively traded 180-cst fuel oil FO180-SIN-DIF were also at their lowest since Aug. 2 after cash discounts fell 60 cents a tonne from the previous session to $1.78 below Singapore quotes on Tuesday.
In the ex-wharf market that is typically seen as representative of underlying market fundamentals, traders said ample prompt supplies were also pressuring term premiums of the break-bulk fuel.
Bunker fuel traders said term deals for the 380-cst fuel for the second-quarter of 2017 had been recently concluded at premiums of about $1 a tonne to Singapore quotes, compared with term premiums of about $3-$4 a tonne in the first quarter.
The latest Indian national statistics for February showed “product output was skewed towards higher production of light products and gasoil while kerosene and fuel oil output were on a downswing last month”, researcher JBC Energy said in a note to clients on Tuesday.
Source: ReutersPrevious Next