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Asia Fuel Oil-380-cst discounts narrow, but liquidity still low

by August 24, 2016 General


Cash discounts of the Singapore 380-cst fuel oil narrowed on Wednesday despite another session of limited liquidity in the physical and paper markets, traders said.

Discounts of the 380-cst fuel FO380-SIN-DIF were 19 cents narrower to 29 cents a tonne to Singapore quotes.

This came after two cash deals were reported in the Platts window totalling 40,000 tonnes of 380-cst fuel oil, industry sources said.

Singapore-based Coastal appeared on both sides of today’s physical trades, buying one 20,000 tonne cargo from PetroChina at a discount of 25 cents a tonne to Singapore quotes for Sept. 16-20 delivery, while selling another at a lower discount of 50 cents a tonne to Hin Leong for loading between Sept. 11-15, sources said.

In the paper markets, trading activity remained relatively quiet for a second straight session.

Just 30,000 tonnes equivalent of 380-cst Singapore fuel oil time spreads were traded on the Intercontinental Exchenge (ICE) by 1630 Singapore time. This includes 5,000 tonne of the Sept/Oct spreads, 10,000 tonnes in the Nov/Dec spreads and another 15,000 tonnes
for the Dec/Jan spreads, industry sources said.

On Tuesday, volumes of traded 380-cst time spreads on ICE were also well below the typical levels, totalling about 25,000 tonnes by 1630 Singapore time.

This is in sharp contrast to the more than 300,000 tonnes of 380-cst times spreads traded on Monday around the same time frame, sources said.

Still, there was a disconnect in price levels of the 380-cst fuel oil Sept/Oct time spreads on Wednesday.

On the ICE platform, the Sept/Oct were trading at a premium of 5 cents a tonne to Singapore by 1630 Singapore time, while on Platts the same time spreads settled at a premium of $1 a tonne to Singapore quotes, said sources.

– The promise that some oil traders and brokers saw for an expanded Panama Canal to become a new route for large tankers will take longer to realize than expected because many ships must first undergo inconvenient retrofits to transit through the new locks, shipping industry experts said.

– Indian refiners processed 13.67 percent more crude oil in July compared with the same period last year, preliminary government data showed on Wednesday.

– Oil refiners reeling from tumbling profits can expect some reprieve in the coming weeks as lower production will tame a huge global excess of gasoline and diesel.

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

 FUEL OIL                                                                               
 CASH ($/T)                 ASIA CLOSE      Change   % Change  Prev      RIC
 Cargo - 180cst                     255.83     1.89      0.74    253.94  FO180-SIN
 Diff - 180cst                        0.83     0.13     18.57      0.70  FO180-SIN-DIF
 Cargo - 380cst                     249.94     1.92      0.77    248.02  FO380-SIN
 Diff - 380cst                       -0.29     0.19    -39.58     -0.48  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          250.94     2.12      0.85    248.82  BK380-B-SIN
 Bunker (Ex-wharf) Premium            1.00     0.20     25.00      0.80

Source: Reuters (Reporting by Roslan Khasawneh; Editing by William Hardy)