Asia Fuel Oil-Asian fuel oil spreads stay weak on plentiful supply


Asian spreads for 180 and 380-centistoke fuel oil were unchanged on Monday, close to the 2016 low hit last week due to plentiful
supplies, traders said.

Spreads for 180-cst held at minus $3.75 a tonne and minus $4 per tonne on the Intercontinental Exchange (ICE).

“I expect spreads will not exceed $5 in these few months,” a Singapore-based trader said on Monday.

That came as fuel oil prices have generally remained around a sixth month high for the last four weeks in choppy trade although they could slip, traders said.

Record onshore stocks in Singapore, which climbed to 31.18 million barrels STKRS-SIN last week are set to dampen bunker and fuel prices, the Singapore-based trader said.

“Prices are mixed. Physical traders expect prices to be lower due to (high) stock levels,” he told Reuters.

Fuel oil inventories soared 7.7 percent, or around 330,000 tonnes, in the week to June 1, data from International Enterprise (IE) Singapore showed last week.

Growth in fuel oil stocks could continue with around 810,000 tonnes, equivalent to 5.43 million barrels, of fuel oil due to arrive in Singapore this month, ship chartering data in the Reuters Eikon terminal showed.

The cargoes are being hauled in 12 separate shipments from load ports in South Korea and the west coast of India in charters fixed by firms including BP and SK Shipping, the data showed.

The deals have helped lift charter rates for Aframax tankers by around $2,000 per day to $18,600 per day, the highest since May 3, freight rate data and ship brokers said.


– Two foreign owners tankers are loading fuel oil at Iran’s Bandar Mahshahr terminal port data obtained by Reuters on Monday. They are among more than 25 European and Asian-owned tankers shipping Iranian oil, allowing Tehran to ramp up exports much faster than analysts had expected following the lifting of sanctions in January.

– India is ready to revive projects including the 120,000 barrels per day Nagarjuna Oil Refinery in the south of the country to boost its oil sector, oil minister Dharmendra Pradhan told a local television channel on Monday.

SINGAPORE CASH DEALS: No trades reported.

 FUEL OIL                                                                           
 CASH ($/T)             ASIA    Change    % Change     Prev Close    RIC
 Cargo - 180cst         233.61      0.12         0.05        233.49  FO180-SIN
 Diff - 180cst           -3.85      0.00         0.00         -3.85  FO180-SIN-DIF
 Cargo - 380cst         228.31      0.29         0.13        228.02  FO380-SIN
 Diff - 380cst           -4.23      0.00         0.00         -4.23  FO380-SIN-DIF
 Bunker (Ex-wharf)-     227.66      0.64         0.28        227.02  BK380-B-SIN
 Bunker (Ex-wharf)       -0.65      0.64        35.00         -1.00                 

Source: Reuters

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