Skip to Content

Asia Fuel Oil-Cracks slip on rising crude; trade activity muted

by August 22, 2017 General

Rising crude oil prices weighed on fuel oil cracks on Tuesday amid muted trade activity in both the physical and paper markets.

Asia’s 180-cst fuel oil crack to Dubai crude for September slipped 17 cents a barrel from the previous session to minus $1.72 a barrel on Tuesday, its lowest since Aug. 14.

Similarly, the front-month 180-cst fuel oil crack to Brent crude was down 8 cents to minus $3.29 a barrel, its lowest since Friday. – Oil prices rose on Tuesday, lifted by indications that supply may be tightening gradually, especially in the United States. – Brent crude’s premium to Dubai rose on Tuesday to $2.13 per barrel for October, the widest spread between the two crude oil benchmarks since Dec. 21, according to two trade sources.

The spread has widened because of higher Brent prices caused by tighter supplies of North Sea crude in August and September, a third trading source said.

No cargo trades were reported in the Platts window on Tuesday.

The UAE’s Adnoc has offered up to seven 85,000 to 90,000 tonne cargoes of straight-run fuel oil (SRFO) for export from its Ruwais refinery for delivery from mid-September through October closing on Aug. 22 with validity until Aug. 29.

Adnoc typically offers five cargoes of SRFO each month, however the national oil firm offered seven cargoes in its latest export tender. – It was unclear if Adnoc’s increased offering was a result of higher production from the Ruwais refinery, or whether this resulted from the cancellation of two earlier SRFO cargoes for September delivery, industry sources said.

Adnoc could not be immediately contacted for comment.

The loading dates for the latest SRFO tender are Sept. 13-15, Sept. 28-30, Oct. 4-6, Oct. 9-11, Oct. 15-17, Oct. 20-22 and Oct. 26-28. – Sources said Adnoc previously sold up to five 85,000 tonne SRFO cargoes for delivery on Sept. 1-3, Sept. 7-9, Sept 13-15, Sept. 19-21 and Sept. 25-27 to undisclosed buyers at a premium of about $18-$22 a tonne to Singapore 180-cst quotes. – Separately, India’s state-owned HPCL offered 30,000 tonnes of 180-cst high-sulphur fuel oil for Sept. 11-14 delivery from Mumbai in a tender closing on Aug. 23.

India’s Reliance offered 40,000 tonnes of carbon black feedstock (CBFS) for loading on Sept. 9-10 from Sikka in a tender closing on Aug. 22.

Sources said Reliance previously sold up to 45,000 tonnes of CBFS to PetroChina at an unknown price level for Sept. 5-6 loading from Sikka.
Source: Reuters (Reporting by Roslan Khasawneh; Editing by Biju Dwarakanath)