Asia Fuel Oil-Rangebound premiums as month-end approaches

Asian fuel oil prices remained largely intact on Wednesday, with premiums rangebound though timespreads weakened marginally as month-end drew close, traders said.

The benchmark 380-cst premium was up just 1 cent a tonne to Singapore spot quotes at 81
cents a tonne, while that of the 180-cst fuel oil was down 3 cents a tonne, Reuters data showed.

There could be a trend to narrow the timespread, which measures the price difference between June and July swaps, to near-zero to minimise initial losses on paper as unsold cargoes roll
from May to June, a Singapore-based trader said.

Demand had been lackluster this week due to high flat prices — a result of crude gains, traders said.

“If this continues, we may have some cargoes to roll over into June too,” said another Singapore-based trader.

However, lower supplies stemming from lower month-on-month arbitrage volumes in June would mitigate any losses due to weak demand.

Western volumes into Asia are expected to be between 3.44 million tonnes and 3.06 million
tonnes, more than 25 percent lower than that in April, which received about 4.66 million tonnes.

*CASH TRADES – Three 380-cst trades.
Hin Leong bought three 20,000-tonne cargoes of 380-cst fuel oil for loading over June 23-27, each at a premium of $3 a tonne to the average Singapore spot quotes in July. Gunvor sold two clips and Mercuria one.

*TENDER NEWS
South Korea’s Western Power has bought 45,000 tonnes of high sulphur fuel oil for delivery
over June 16-20 into Pyeongtaek at a premium of $17-18 a tonne to Singapore spot quotes.

Indian Oil Corp has sold 30,000 tonnes of 180-cst for June 16-18 loading from Kandla at a
discount of $12-13 a tonne to Singapore spot quotes, about 20 percent firmer than its last sale
to PetroSummit at a discount as narrow as $15 a tonne to Singapore spot quotes.
Source: Reuters (Reporting by Jane Xie; Editing by Gopakumar Warrier)