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Bunker prices hits 10-month low; demand weak

Outright prices of ex-wharf 380-cst marine fuel oil fell to the lowest level in more than 10 months on Monday, in line with weaker crude prices and little demand, traders said.

The 380-cst bunker fuel oil fell to $583 a tonne, down $3.50 a tonne from Friday.

Crude prices took a hit on Monday on the back of an agreement by Libyan rebels occupying
four eastern oil ports to end an eight-month blockade, raising the prospect of increased supply
to world markets.

Offers for the marine grade fuel have slid below the $600 level since mid-March, while
demand has not picked up significantly since February, bunker traders said. Sales fell to a
one-year low in February, data from the Singapore Maritime Port Authority showed.

"If freight doesn't pick up, then neither will bunker demand," a Singapore-based fuel oil
trader said.

Oil flows in the region tend to decline in the second quarter, which is refinery maintenance
season, shipping sources said.

Reflecting the soft market conditions, India's Mangalore Refinery and Petrochemicals Ltd
sold 80,000 tonnes of 380-cst fuel oil to Mercuria at a premium of $1.50-1.85 a tonne to
Singapore spot quotes, traders said.

This was about 10 percent lower than the April 13-15 loading cargo that MRPL sold to
Glencore at a premium of $2 a tonne to Singapore spot quotes.

The Indian refiner is also expected to continue exports of fuel oil for at least another two
months, before its fluid catalytic cracker is fully operational, a source close to the matter
said.

*CASH DEALS: Two 380-cst trades.

Hin Leong bought from Vitol two 20,000 tonne cargoes of 380-cst for loading over May 1-5 at $581 a tonne each.
Source: Reuters (Reporting by Jane Xie; editing by Jane Baird)