Asian fuel oil spreads weakened slightly on Monday on expectations of a higher volume of arbitrage cargoes next month on what is anticipated to be lower demand, traders said on Monday.
The July-August spread for 380-centistoke high sulphur fuel oil widened to a discount of $2.70 to Singapore quotes on Monday, from a discount of $1.55 a tonne on Friday.
Spreads for 180-cst high sulphur fuel slipped to a discount of $2.95 on Monday, from a discount of $2.50 in the previous session.
“There are no bargain sales. Everyone is holding back waiting for the July arbitrage volumes,” said a Singapore-based trader.
Slightly under 3 million tonnes of fuel oil is expected to shipped into Asia in July against earlier expectations of 2-2.5 million tonnes, a second trader said.
Spot cargoes totaling around 1.25 million tonnes have beencfixed for discharge in Singapore next month, according to Reuters’ chartering data on Monday.
That compares with around 1.15 million tonnes that has been fixed for anticipated arrival in August, the data showed.
“There is a little bit of tightness in the market because of the arbitrage situation but the bunker market is still stable,” the first trader said.
Bunker sales in Singapore hit a record 4.36 million tonnes in May, data from the Maritime and Port Authority of Singapore showed last week.
But traders expected sales volumes to fall this month on fewer ship calls due to traditionally weaker summer shipping activity.
– Japan has bought more than 200,000 barrels of oil per day from Tehran in the last month, said Mohsen Ghamsari, director for international affairs at the National Iranian Oil Company (NIOC), according to the oil ministry’s news agency SHANA on Monday.
– Indonesia is considering adding global oil benchmarks Brent and West Texas Intermediate (WTI) to its crude pricing to reduce volatility, in a move that could be implemented next month, said Wiratmaja Puja, director general of oil and gas at the country’s oil ministry said on Friday.
– Japan’s nuclear regulator on Monday approved an application from Kansai Electric Power Co to extend the life of two ageing reactors beyond 40 years, the first such approval under new safety requirements imposed since the Fukushima disaster.
SINGAPORE CASH TRADES: No cash deals
FUEL OIL CASH ($/T) ASIA Change % Prev Close RIC CLOSE Change Cargo - 180cst 242.60 13.05 5.69 229.55 FO180-SIN Diff - 180cst -3.37 -0.15 4.66 -3.22 FO180-SIN-DIF Cargo - 380cst 238.66 13.55 6.02 225.11 FO380-SIN Diff - 380cst -3.08 -0.34 12.41 -2.74 FO380-SIN-DIF Bunker 238.72 13.11 5.81 225.61 BK380-B-SIN (Ex-wharf)- 380cst Bunker (Ex-wharf) 0.06 -0.44 -88.00 0.50 Premium
Source: ReutersPrevious Next