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Asia Fuel Oil-Cash premiums rise as most suppliers pull back

by October 19, 2016 General


Cash differentials for Asia’s benchmark 180-cst and the actively traded 380-cst fuel oil grades widened their premiums to Singapore quotes as most suppliers in the Platts window were absent on Wednesday.

Vitol was the only supplier in the window on Wednesday, offering two 20,000 tonne cargoes of the 380-cst fuel oil, industry sources said. There were no offers for the 180-cst fuel oil.

On Tuesday, 40,000 tonnes of the 180-cst fuel were traded in the window which was the highest traded volume in more than two months for the lower viscosity fuel oil in a single session.

By comparison, there were six standing offers for 380-cst fuel on Tuesday and another two offers for the 180-cst fuel.

“Suppliers could be holding back because they might be expecting a rise in flat prices from rising crude,” said a Singapore-based trader, adding that the current supply and demand fundamentals were relatively balanced.

The absence of sellers in the window has to some extent pushed eager buyers to raise their bids, which in turn helped lift cash premiums, traders said.

Cash differentials for the 380-cst fuel rose for a third consecutive session, widening their premiums by 60 cents to 64 cents a tonne above Singapore quotes, its widest since Sept. 21.

Similarly, cash premiums for the benchmark 180-cst fuel oil rose 31 cents from the previous session to $1.98 a tonne above Singapore quotes.

 OUTSTANDING ASIA/MIDEAST FUEL OIL TENDERS:                                        
 ISSUER               GRADE:                            VOLUME:      DELIVERY      CLOSE (VALID)
 Indonesia/Pert  B: 380cst HSFO 3% S max (Balikpapan)   30K Bbls     Oct 26-28     Oct 17 (Oct18)
                 B: 380cst HSFO 3% S max (Jakarta)      30K Bbls     Nov 1-3       Oct 17 (Oct18)
 Taiwan/Formosa  S: 380cst 4% S max (Mailiao)           40KT         Nov 1-3       Oct 19 (Oct 20)
 India/MRPL      S: VGO (Mangalore)                     40KT         Nov 3-10      Oct 19 (Oct 20)
 ISSUER               GRADE:                            VOLUME:      DELIVERY      RESULT
 Taiwan/Formosa  S: 280cst 3.5% S max (Mailiao)         40KT         Oct 25-27     Shell/ MOPS 180 -$7-12 FOB
 Taiwan/CPC      B: 380cst 3.5% S max (Shalung,         80KT         Nov 1-30      Gunvor/ MOPS 380 approx. +$5 CFR 
                 Taichung, Kaohsiung or other)                                     
 India/IOC       S: 380cst 4.7% S max (Chennai)         35KT x5      Nov - Jan     Gulf Petrochem/ 380 MOPS & Argus Avg -$7-$8
 Taiwan/CPC      B: LSFO 0.5% S max (Kaohsiung,         40KT         Nov 1-30      NA/ MOPS 180 +50-55 CFR 
                 Keelung, Taichung, or other)                                      
 Taiwan/CPC      S: 180cst 1.5% S max (Kaohsiung)       20KT         Oct 1-31      NA/ MOPS 380 -$20 CFR or FOB
 India/HPCL      S: 380cst 4% S max (Visak)             30KT         Oct 18-20     Oct 6/ NA


– China’s crude oil production fell 9.8 percent in September from a year earlier, marking the second-biggest year-on-year decline on record, government data showed, as major producers shut high-cost wells to rein in spending.

– OPEC should be able to reach a deal next month to limit oil production without too much disagreement about individual countries’ output levels, the producer group’s secretary-general said on Tuesday.

– Gazprom Neft , the oil arm of Russian state gas firm Gazprom , could slow its oil output growth compared with the current plan if needed, Chief Executive Alexander Dyukov told Rossiya 24 TV.

SINGAPORE CASH TRADES: No cash deals reported. For further details, please see

 FUEL OIL                                                                                 
 CASH ($/T)                 ASIA CLOSE      Change   % Change   Prev       RIC
 Cargo - 180cst                     291.98     4.77       1.66     287.21  FO180-SIN
 Diff - 180cst                        1.98     0.31      18.21       1.68  FO180-SIN-DIF
 Cargo - 380cst                     284.18     4.61       1.65     279.57  FO380-SIN
 Diff - 380cst                        0.64     0.60    1500.00       0.04  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst          285.75     5.75       2.05     280.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium            1.57     1.14     265.12       0.43

Source: Reuters (Editing by Louise Heavens)