Asia Fuel Oil-380cst cash discounts widen as selling pressure mounts
The cash differential for 380cst fuel oil fell for a second straight session to their lowest levels since March 3, as abundant stocks start to weigh on the market alongside a sluggish demand outlook for the year, traders said.
Cash discounts for 380cst fuel oil fell to 83 cents a tonne below Singapore quotes on Wednesday despite continued momentum in cash deals. FO380-SIN-DIF
“Cash offers are becoming more aggressive compared to the past few weeks with deals trading between discounts of $1 to $1.50,” one Singapore-based trader said.
There was robust buying and selling, with eight trades totalling 140,000 tonnes of 380cst fuel oil traded along with 40,000 tonne of the 180cst grade.
A total of 5.62 million tonnes of fuel oil have traded in the Singapore Market on Close (MOC) process so far in March, nearing last June’s record of 5.97 million tonnes.
In the swaps market, prompt month spread volumes were relatively subdued compared to recent weeks but momentum in the May-June spreads is starting to build, another Singapore trader said.
May-June spreads for 380cst fuel oil were at a discount of $2.75 on Wednesday, 50 cents narrower from the day before.
Kuwait has agreed with neighbour Saudi Arabia to resume oil production at the jointly operated Khafji field, the OPEC member state’s acting oil minister said on Tuesday, weeks before oil producers are expected to meet to discuss a global output freeze.
India’s crude imports rose in February with Reliance importing 13.7 percent more oil than in January. Essar Oil, the top Indian buyer of Iranian crude, raised imports from Tehran by about two-thirds in February compared with the previous month.
Latin American oil producers Ecuador, Venezuela, Colombia and Mexico may meet on April 8 to prepare an output freeze proposal for an April 17 meeting of OPEC and non-OPEC countries, Ecuador’s oil minister said on Tuesday.
SINGAPORE CASH DEALS – Eight deals reported. For details, please see
FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Cargo - 180cst 181.10 0.74 0.41 180.36 FO180-SIN Diff - 180cst -1.25 -1.21 3025.00 -0.04 FO180-SIN-DIF Cargo - 380cst 176.99 1.52 0.87 175.47 FO380-SIN Diff - 380cst -0.83 -0.68 453.33 -0.15 FO380-SIN-DIF Bunker (Ex-wharf)- 380cst 178.49 1.07 0.60 177.42 BK380-B-SIN Bunker (Ex-wharf) Premium 1.50 -0.45 -23.08 1.95
Source: Reuters (Reporting by Roslan Khasawneh. Editing by Jane Merriman)