Asia’s 380-cst fuel oil cash premiums slipped to a near 1-month low on Wednesday amid weaker buying interest, but further falls are seen limited over the near term by bullish supply and demand fundamentals, two traders said. Following nearly two weeks of uninterrupted gains, sources also said falling crude prices on Wednesday may have kept some traders on the sidelines ahead of EIA data released later in the day.
Two cargo trades were reported in the Platts window, including one 20,000 tonne cargo of 180-cst fuel and another 20,000 tonnes of 380-cst fuel oil.
Total fuel oil flows into East Asia for June closed at a 4-month high of around 6.8 million tonnes mainly on spillovers from May and despite lower Middle East and intra-Asia supplies, assessments by Thomson Reuters Oil Research showed.
July arrivals are expected to be lower, with Western arrivals closing at a 12-month low of just over 3 million tonnes, while Middle East inflows are currently at below-average levels of just over 800,000 tonnes so far, the assessments showed.
Trader sources currently estimate some 3 to 4 million tonnes of fuel oil will arrive into Singapore in July and August each.
South Korea’s EWP is seeking up to 20,000 tonnes of HSFO with a 540-cst maximum viscosity and 2.5 percent sulphur content for delivery at Ulsan port between July 21-25 in a tender closing July 11.
EWP last issued a tender seeking fuel oil in January for 50,000 tonnes of the same quality fuel for delivery over Feb. 12-16. – South Korean utilities typically import several fuel oil cargoes every month for power generation but have turned to cheaper alternatives like LNG and coal since the start of the year in the wake of rising oil prices, industry sources said.
Pakistan’s PSO is seeking up to 705,000 tonnes of fuel oil for delivery in September in a tender closing on July 24 and valid until Aug. 7.
PSO’s tender includes 10 cargoes of 65,000 tonnes each of 180-cst HSFO on an FOB basis along with 55,000 tonnes of LSFO on a C&F basis.
In the United Arab Emirates (UAE), the Fujairah Oil Industry Zone (FOIZ) fuel oil inventories were nearly unchanged in the week to July 3 at 12.127 million barrels, data via S&P Global Platts showed.
Last week, Fujairah’s fuel oil inventories rose to their second highest since stocks reporting began in mid-January, almost 200,000 barrels below the record 12.328 million barrels seen in the week to March 27.
NEW MOC MEMBERS
S&P Global Platts on Wednesday added World Fuel Services (Singapore) Pte Ltd and Seven Seas Oil Trading Pte Ltd to its Asia Market On Close (MOC) assessment process for Singapore physical bunkers, the company said in a subscriber note. – This follows the inclusion of Fratelli Cosulich Bunkers (S) Pte Ltd in the MOC process for physical bunkers announced on June 18.
Source: ReutersPrevious Next