Asia Fuel Oil-Aggressive selling continues to pressure ex-wharf differentials


Singapore ex-wharf markets for 380cst the fuel oil have come under strong downward pressure over the past week as aggressive selling swung the bunker differential from a $1.25 a tonne premium at the start of the week to a discount of $2 on Friday, traders said.

On Tuesday intense selling pressure had pushed 380cst ex-wharf differentials to their lowest levels since June last year at minus $3 a tonne.

“Sellers were eager to clear their tanks to make space for more, and selling at ex-wharf earns you more than selling at spot prices,” one Singapore-based trader said.

Onshore stocks of Singapore fuel oil surged to their highest in more than three years, jumping by 19.4 percent from a week earlier to 31.002 million barrels STKRS-SIN in the week to May 18, data from International Enterprise (IE) Singapore showed o Thursday.

Fuel oil stocks in the Amsterdam-Rotterdam-Antwerp (ARA) hub rose by 34,000 tonnes in the week to May 19 to a total of 1.187 tonnes, data from Dutch consultancy PJK International showed.

The 3 percent increase in ARA fuel oil inventories STK-FO-ARA marks the fourth consecutive week of stock builds due to an arbitrage window that remains shut, traders said.

China’s monthly fuel oil output in April climbed 14.9 percent from the same time last year to 2.31 million tonnes.

Rates for an 80,000 dwt Aframax tanker from Southeast Asia to East Coast Australia snapped a month long fall this week, rising on Thursday to almost W90 on the Worldscale measure from around W86.50 last week.

“The Aframax market has been incredibly painful – there have been no fuel oil moves for two months, but now we are seeing a few more Aframax cargoes. The worst is over,” the Singapore broker said.


– Venezuelan crude oil output fell to about 2.53 million bpd in the first quarter of 2016, against 2.72 million bpd in the same period last year, data from the Organization of the Petroleum Exporting Countries (OPEC) showed.

– Oil traders from Houston to the North Sea are tapping into plentiful storage onshore and offshore, evincing little sign of concern yet about mammoth supply losses from Canada to Nigeria that have knocked out about 2 million bpd of output.

SINGAPORE CASH DEALS - Two cash deals reported. For further details, please see
 FUEL OIL                                                                               
 CASH ($/T)                 ASIA CLOSE      Change   % Change  Prev      RIC
 Cargo - 180cst                     231.11     8.14      3.65    222.97  FO180-SIN
 Diff - 180cst                       -1.41     0.28    -16.57     -1.69  FO180-SIN-DIF
 Cargo - 380cst                     226.12     7.53      3.44    218.59  FO380-SIN
 Diff - 380cst                       -2.27     0.15     -6.20     -2.42  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          224.12     7.83      3.62    216.29  BK380-B-SIN
 Bunker (Ex-wharf) Premium           -2.00     0.30    -13.04     -2.30

Source: Reuters

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