Asia Fuel Oil-Robust demand lifts 180-cst premiums to 2017 high


Firm bidding interest lifted cash differentials of Asia’s 180-cst fuel oil FO180-SIN-DIF to their highest since December on Monday amid robust demand for the lower viscosity fuel.

Industry sources said fewer arrivals of cutter stocks into Singapore, which are used to blend high-viscosity material into lower viscosity fuel oils, have also been boosting premiums of 180-cst fuel oil since the start of May.

Twelve cargo trades were reported in the Platts window on Monday totalling 240,000 tonnes of fuel oil, the most in number since April 17.

The last time traded volumes of physical cargoes were as high was on April 21.

Monday’s physical trades included eight 380-cst fuel oil deals totalling 160,000 tonnes together with four 180-cst fuel oil trades totalling 80,000 tonnes.

Mercuria snapped up ten of the twelve cargoes, followed by Coastal and PetroChina which each bought one.

By contrast, Monday’s sellers were more dispersed and included Shell, Lukoil, Glencore, Koch, Coastal, Gunvor and Total.

A total of 420,000 tonnes of 380-cst fuel oil and 200,000 tonnes of 180-cst fuel have traded in the window since the start of May.

180-cst fuel oil cash premiums FO180-SIN-DIF rose $1.54 a tonne from the previous session to $4.32 a tonne to Singapore quotes, the highest since Dec. 28.

Sentiment in the paper markets was little changed from the previous session, leaving swaps largely unchanged.

The 380-cst June/July time spread contract was the most actively traded time spread on the Intercontinental Exchange (ICE) on Monday.

The ICE-traded 380-cst June/July contract was 5 cents a tonne lower from the previous session at 45 cents a tonne by 7:00 p.m. Singapore time (1100 GMT) after trading about 220,000 tonnes in contracts.

BP is shipping a cargo of straight-run fuel oil (SRFO) from UAE’s Ruwais refinery to Washington in the U.S. west coast in what traders say is an unusual move.

The Atlantic Dawn Aframax tanker laden with up to 80,000 tonnes of SRFO is estimated to arrive on June 7 at Cherry Point where BP owns and operates a 234,000 barrels per day refinery.

 FUEL OIL                                                                                  
 CASH ($/T)                 ASIA CLOSE      Change   % Change   Prev       RIC
 Cargo - 180cst                     296.58     5.93       2.04     290.65  FO180-SIN
 Diff - 180cst                        4.32     1.54      55.40       2.78  FO180-SIN-DIF
 Cargo - 380cst                     287.16     4.79       1.70     282.37  FO380-SIN
 Diff - 380cst                        2.72    -0.13      -4.56       2.85  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          290.50     5.00       1.75     285.50  BK380-B-SIN
 Bunker (Ex-wharf) Premium            3.34     0.21       6.71       3.13

Source: Reuters 

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