24-05-2016

Asia Fuel Oil-380cst cash discounts deepen amid aggressive selling

asiafuel

Cash differentials of 380cst fuel oil extended last week’s losses and continued to widen their discounts on Monday amid aggressive supplier offers.

“Today’s deals were done between minus $3.50 and minus $4 a tonne. Looks like suppliers were eager to get rid of some volumes to clear some storage space,” said a Singapore-based trader.

Six deals totalling 120,000 tonnes of 380cst fuel oil were concluded on Monday with Gunvor buying four 20,000 tonne cargoes from KIB, and Vitol bought the remaining two cargoes from BP, industry sources said.

On Friday, two 380cst fuel oil cash deals for were reported which traded at a discount between minus $2 and minus $3 a tonne to Singapore quotes, the sources said.

“Even though the arbitrage window is still pretty tight, there’s plenty of fuel oil around as we saw from last week’s inventory build,” said another Singapore-based trader.

“Even if arbitrage flows over the next month are two are tight, there’s plenty of fuel oil here for now.”

Onshore stocks of Singapore fuel oil surged to an all-time high last week, jumping 19.4 percent from a week earlier to 31.002 million barrels STKRS-SIN, data from International Enterprise (IE) Singapore released on Thursday showed.

Also weighed down by aggressive selling, albeit to a lesser extent, 380cst fuel oil ex-wharf differentials widened their discount to about minus $2 a tonne to Singapore quotes on Monday, traders said.

In the Middle East, Energy trader Vitol and shipping fuel company Aegean Marine Petroleum Network swapped 7,000 tonnes of July 180-centistoke in the first-ever trade of fuel oil derivatives on the Dubai Mercantile Exchange, the DME said on Monday.

RELATED MARKET NEWS:

– Indian refiners processed 17.95 percent more crude oil in April than a year earlier, preliminary government data showed on Friday.

– Iran has no plans to freeze the level of its oil production and exports, Deputy Oil Minister Rokneddin Javadi was quoted on Sunday as saying, as the country tries to raise its crude exports to pre-sanctions levels.

– Thousands of layoffs at state-linked companies in Abu Dhabi are a fresh sign the Gulf’s wealthy oil states are hunkering down for a long period of austerity as low crude prices pressure their economies.

SINGAPORE CASH DEALS – Six cash deals reported. For further details, please see

 FUEL OIL                                                                               
 CASH ($/T)                 ASIA CLOSE      Change   % Change  Prev      RIC
                                                               Close     
 Cargo - 180cst                     229.11    -2.00     -0.87    231.11  FO180-SIN
 Diff - 180cst                       -1.34     0.07     -4.96     -1.41  FO180-SIN-DIF
 Cargo - 380cst                     222.65    -3.47     -1.53    226.12  FO380-SIN
 Diff - 380cst                       -3.25    -0.98     43.17     -2.27  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          220.55    -3.57     -1.59    224.12  BK380-B-SIN
 Bunker (Ex-wharf) Premium           -2.10    -0.10      5.00     -2.00

Source: Reuters

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