Asia Fuel Oil-Singapore supplies tighten on busy loadings schedules
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 $1.69 a tonne below Singapore quotes, 41 cents lower from Thursday.
This marks the sixth consecutive decline for 380cst cash differentials and is the lowest since March 1.
Total fuel oil flows into East Asia for April have been provisionally pegged at 7.7 to 7.8 million tonnes up 4.9 percent from March volumes of 7.37 million tonnes and broadly steady to the year-to-date (YTD) monthly average of 7.41 million tonnes, according to assessments by Thomson Reuters Oil Research & Forecast.
“Preliminary Western inflows for May are currently at around 3.3-3.4 million tonnes and well below April volumes as tanker bookings remain thin due to a confluence of factors – a shut West-to-East arbitrage window, narrow East-West spreads and higher month-on-month freight for Very Large Crude Carriers (VLCCs) plying both the Amsterdam-Rotterdam-Antwerp (ARA)-Singapore and Caribbean-Singapore routes for the month,” said the assessment report released on Thursday.
-China’s implied oil demand fell 2.4 percent in March from a year earlier to about 10.28 million barrels per day, according to Reuters calculations based on official data.
-China’s March refinery throughput fell 0.2 percent compared with the same period a year earlier to 44.91 million tonnes, or 10.58 million barrels per day (bpd), data from the National Bureau of Statistics showed on Friday.
-Japan’s biggest oil refiner JX Holdings is adapting refineries to produce more gasoline for sales overseas, as Japan joins a regional bonanza driven by strong car sales and low prices and finds an outlet for its chronic refining over capacity.
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FUEL OIL CASH ($/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)