Asia Fuel Oil-Heavy selling drags 380-cst cash to discount


Asia’s mainstay 380-cst high-sulphur fuel flipped into a discount for the first time since Aug. 14 as heavy selling weighed on cash differentials on the first trading session of September. By contrast, the 380-cst balance-of-Sept/Oct time spread on the Intercontinental Exchange edged higher, despite limited trade activity and heavy selling in the physical market, industry sources said. The front month visco spread and East-West arbitrage spread were also little changed on Monday. Meanwhile, inventories in northwest Europe soared to a near five-month high, mirroring similar inventory builds in Singapore in the past week.

10 cargo trades were reported in the Platts window, totalling 205,000 tonnes of 380-cst fuel oil.

Trafigura was the lead buyer on Monday, snapping up six 20,000 tonnes cargoes, followed by Hin Leong (40,000 tonnes), Vitol (25,000 tonnes) and Coastal (20,000 tonnes).

Suppliers of the cargoes were led by Mercuria with 125,000 tonnes as well as Coastal, PetroChina, Socar and Socal with 20,000 tonnes each.

In August, the top two buyers of fuel oil cargoes in the window were Mercuria (562,000 tonnes) and Hin Leong (340,000 tonnes), while the top sellers were Glencore (260,000 tonnes) and Trafigura (240,000 tonnes), data compiled by Reuters showed.

Fuel oil stocks in the Amsterdam-Rotterdam-Antwerp refining and storage hub rose 27 percent, or 296,000 tonnes, to 1.37 million tonnes in the week to Aug. 31 as exports from the region slowed, PJK’s Patrick Kulsen said on Thursday.

Weekly ARA fuel oil stocks are now at their highest since the week to March 30 and are 90 percent higher from the same time last year.

On Thursday, official data showed Singapore onshore fuel oil inventories rose 7 percent, or 241,000 tonnes, to 3.93 million tonnes in the week to Aug. 30, the highest since March 22.

Saudi’s Samref sold 80,000 tonnes of 650-cst to 700-cst high-sulphur fuel oil (HSFO) loading on Sept. 17-21 to BP from Yanbu at an unknown price level, industry sources said.

BP placed on subjects an aframax vessel, the CS Zephyr, to load 80,000 tonnes of fuel oil from Yanbu on Sept. 17-21, shipbroker reports showed.

Industry sources said BP’s purchase of high viscosity fuel oil from Samref made sense as the company has ample supplies of cutter stock that can be used in blending; however this could not be directly confirmed.

Taiwan’s Formosa sold 40,000 tonnes of 380-cst HSFO with a maximum 4 percent sulphur content for Sept. 8-10 loading from Mailiao to Simosa at a discount of about $4 to $5 a tonne to Singapore 180-cst quotes on an FOB basis.

Source: Reuters

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