Asia Fuel Oil-380cst cash discounts widen as suppliers seek to offload cargoes
The Singapore 380cst cash discount continued to widen on Tuesday as traders sought to offload cargoes, expecting supplies to remain ample throughout April and early May.
Cash discounts for the 380cst fuel oil widened 30 cents from Monday to a contango of 58 cents a tonne as suppliers were keen to offload cargoes at bigger discounts, traders said.
While Monday’s discounts on 380cst physical trades were only up to 50 cents a tonne, on Tuesday five 380cst fuel oil trades were reported at a discount range equivalent to minus $1.30 to minus 50 cents a tonne to Singapore quotes, industry sources said. A sixth cargo of 180cst fuel oil was also reported to have been sold at about minus $1.40 a tonne to Singapore quotes, sources said.
Singapore-based Hin Leong was both an active buyer and seller on Tuesday. It purchased one cargo of 380cst of fuel oil from CCMA at a discount of 50 cents a tonne to Singapore quotes for delivery between April 27 and May 1, and sold another two cargoes of the 380cst fuel to Coastal and Vitol at $189 a tonne each and for delivery between May 8 to 12 and May 2 to 6, respectively, data from industry sources showed.
Hin Leong was also the seller of the sole 180cst fuel oil cargo to Vitol for delivery May 2 to 6 for $193 a tonne.
Gunvor and P66 sold the remaining two 380cst fuel oil cargoes to Vitol at a discount of 50 cents a tonne to Singapore quotes and delivery between May 2 to 6 and May 8 to 12, respectively.
In marine fuels, issues constraining bunker operators in the Singapore market are expected to place upward pressure on ex-wharf premiums, traders said.
“Ex-wharf premiums should be stronger but they have been slow to catch up since the flat price has recently risen so quickly,” said a Singapore-based trader.
Ex-wharf premiums of Singapore 380cst fuel oil traded around $1 to $2 a tonne above Singapore quotes on Tuesday, industry sources said.
-Global oil markets will likely see flat supply this year, with increases in Iranian output offset by drops in production in other parts of the world, BP Chief Economist Spencer Dale said.
-China’s total crude oil refining capacity is expected to hold at about 16 million barrels per day (bpd) this year following industry consolidation, but fuel exports are still set to rise amid overcapacity, an industry association said.
SINGAPORE CASH DEALS – Six deals reported. For details, please see
FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Cargo - 180cst 193.17 4.08 2.16 189.09 FO180-SIN Diff - 180cst -1.29 -0.56 76.71 -0.73 FO180-SIN-DIF Cargo - 380cst 189.56 4.81 2.60 184.75 FO380-SIN Diff - 380cst -0.58 -0.30 107.14 -0.28 FO380-SIN-DIF Bunker (Ex-wharf)- 380cst 190.76 5.01 2.70 185.75 BK380-B-SIN Bunker (Ex-wharf) Premium 1.20 0.20 20.00 1.00
Source: Reuters (Reporting by Roslan Khasawneh; Editing by Susan Fenton)