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Asia Fuel Oil-Visco spread narrows to more than 4-week low
The viscosity spread, or price difference between the 180-cst and 380-cst fuel oil swaps, narrowed for the second straight session on Wednesday to a more than four-week low as blending demand is expected to be lower in early May.
The viscosity spread dived $2 a tonne to $6 a tonne on Wednesday, Reuters data showed.
The spread was dragged down by a weaker 180-cst market, which saw its cash differential fall 17 cents a tonne to a more than six-month low of minus $2.33 a tonne to Singapore spot quote.
Sales of marine fuel oil in Singapore has been slow since February, when it hit a one-year low, and hardly saw a pick-up despite a collapse in flat prices, sources said.
"Indeed, flat prices are low but there is no urgency to commit when supply is plentiful," said a Singapore-based fuel oil trader.
Besides slimmer bunker demand, lower volumes of western supply originating from the Americas in early May, have also removed some requirements for 180-cst as a blendstock to produce less viscous fuel oil.
Most of the fuel supply scheduled to arrive in Singapore in the first 10 days of May will be from Europe, which requires less blending, sources said.
In other market news, construction of Egypt's largest oil refinery, with capacity to produce half the volume of diesel currently being imported, is expected to begin next week, the project leader said.
The Egyptian Refinery Company plant, 20 kilometres north of Cairo, will use fuel oil produced by an old refinery nearby as feedstock to produce 2.3 million tonnes of diesel per year.
*CASH DEALS: One 180-cst and 380-cst trade each.
Vitol bought from BP 40,000 tonnes of 180-cst for April 26-30 at a discount of $3 a tonne to Singapore spot quotes.
BP bought from Unipec 20,000 tonnes of 380-cst for May 5-9 at a discount of $1.50 a tonne to Singapore spot quotes.
*MARKET NEWS
Oil trader Gunvor plans to increase exports of oil products via the Russian Baltic port of Ust-Luga to 21.4 million tonnes in 2014 versus 16.8 million tonnes last year, Konstantin Khamlay, head of Gunvor's Ust-Luga business, said on Wednesday.
Stocks of low sulphur fuel oil rose by 8.64 percent on week to 0.74 million kiloliters, while refinery throughput stood at 88.7 percent, versus 88.5 percent the previous week, data from the Petroleum Association of Japan showed on Wednesday.
The U.S. Energy Information Administration on Tuesday raised its 2014 world oil demand growth forecast by 10,000 barrels per day to 1.23 million bpd.
Source: Reuters (Reporting by Jane Xie; Editing by Joyjeet Das)
The viscosity spread dived $2 a tonne to $6 a tonne on Wednesday, Reuters data showed.
The spread was dragged down by a weaker 180-cst market, which saw its cash differential fall 17 cents a tonne to a more than six-month low of minus $2.33 a tonne to Singapore spot quote.
Sales of marine fuel oil in Singapore has been slow since February, when it hit a one-year low, and hardly saw a pick-up despite a collapse in flat prices, sources said.
"Indeed, flat prices are low but there is no urgency to commit when supply is plentiful," said a Singapore-based fuel oil trader.
Besides slimmer bunker demand, lower volumes of western supply originating from the Americas in early May, have also removed some requirements for 180-cst as a blendstock to produce less viscous fuel oil.
Most of the fuel supply scheduled to arrive in Singapore in the first 10 days of May will be from Europe, which requires less blending, sources said.
In other market news, construction of Egypt's largest oil refinery, with capacity to produce half the volume of diesel currently being imported, is expected to begin next week, the project leader said.
The Egyptian Refinery Company plant, 20 kilometres north of Cairo, will use fuel oil produced by an old refinery nearby as feedstock to produce 2.3 million tonnes of diesel per year.
*CASH DEALS: One 180-cst and 380-cst trade each.
Vitol bought from BP 40,000 tonnes of 180-cst for April 26-30 at a discount of $3 a tonne to Singapore spot quotes.
BP bought from Unipec 20,000 tonnes of 380-cst for May 5-9 at a discount of $1.50 a tonne to Singapore spot quotes.
*MARKET NEWS
Oil trader Gunvor plans to increase exports of oil products via the Russian Baltic port of Ust-Luga to 21.4 million tonnes in 2014 versus 16.8 million tonnes last year, Konstantin Khamlay, head of Gunvor's Ust-Luga business, said on Wednesday.
Stocks of low sulphur fuel oil rose by 8.64 percent on week to 0.74 million kiloliters, while refinery throughput stood at 88.7 percent, versus 88.5 percent the previous week, data from the Petroleum Association of Japan showed on Wednesday.
The U.S. Energy Information Administration on Tuesday raised its 2014 world oil demand growth forecast by 10,000 barrels per day to 1.23 million bpd.
Source: Reuters (Reporting by Jane Xie; Editing by Joyjeet Das)
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