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Wednesday, November 13th, 2019

Asia Fuel Oil-Singapore supplies tighten on busy loadings schedules

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by April 15, 2016 General

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Supplies of Singapore fuel oil are showing signs of tightness due to busy loading schedules at local terminals but the still weak ex-wharf premiums have been slow to respond.

With roughly half of last month’s near-record physical trades totalling 5.82 million tonnes due to be delivered over the past two weeks, operational logistics has limited sellers ability to replenish supplies, traders said.

“Buyers are starting to ask for non-Universal Terminals for loadings,” said one Singapore-based trader.

However, despite the temporary tightness in supplies, ex-wharf premiums are yet to firm and reflect the situation.

Ex-wharf premiums currently trade at around $1 to $2 a tonne to Singapore quotes and “that only says there’s no tightness,” said one Singapore-based trader.

“Ex-wharf premiums have probably been slow to react because of the sharp rise in cash price for fuel oil recently,” another Singapore trader said.

Cash discounts also seemed to ignore the anticipated supply tightness in May as a result of an arbitrage window that remains shut, traders said.

380cst fuel oil cash discounts widened to $1.69 a tonne below Singapore quotes, 41 cents lower from Thursday.

This marks the sixth consecutive decline for 380cst cash differentials and is the lowest since March 1.

ARBITRAGE FLOWS
Total fuel oil flows into East Asia for April have been provisionally pegged at 7.7 to 7.8 million tonnes up 4.9 percent from March volumes of 7.37 million tonnes and broadly steady to the year-to-date (YTD) monthly average of 7.41 million tonnes, according to assessments by Thomson Reuters Oil Research & Forecast.

“Preliminary Western inflows for May are currently at around 3.3-3.4 million tonnes and well below April volumes as tanker bookings remain thin due to a confluence of factors – a shut West-to-East arbitrage window, narrow East-West spreads and higher month-on-month freight for Very Large Crude Carriers (VLCCs) plying both the Amsterdam-Rotterdam-Antwerp (ARA)-Singapore and Caribbean-Singapore routes for the month,” said the assessment report released on Thursday.

MARKET NEWS:

-China’s implied oil demand fell 2.4 percent in March from a year earlier to about 10.28 million barrels per day, according to Reuters calculations based on official data.

-China’s March refinery throughput fell 0.2 percent compared with the same period a year earlier to 44.91 million tonnes, or 10.58 million barrels per day (bpd), data from the National Bureau of Statistics showed on Friday.

-Japan’s biggest oil refiner JX Holdings is adapting refineries to produce more gasoline for sales overseas, as Japan joins a regional bonanza driven by strong car sales and low prices and finds an outlet for its chronic refining over capacity.

SINGAPORE CASH DEALS – Five deals reported. For details, please see

 FUEL OIL                                                                                          
 CASH ($/T)                 ASIA CLOSE         Change     % Change     Prev Close   RIC
 Cargo - 180cst                        191.18      -1.30        -0.68       192.48  FO180-SIN
 Diff - 180cst                          -1.89      -0.03         1.61        -1.86  FO180-SIN-DIF
 Cargo - 380cst                        186.96      -1.89        -1.00       188.85  FO380-SIN
 Diff - 380cst                          -1.69      -0.41        32.03        -1.28  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst             188.46      -2.39        -1.25       190.85  BK380-B-SIN
 Bunker (Ex-wharf) Premium               1.50      -0.50       -25.00         2.00

Source: Reuters (Reporting by Roslan Khasawneh; Editing by Keith Weir)

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