Asia Fuel Oil-380-cst marine price hits near six-month high

Firmer crude prices drove Singapore 380-cst marine fuel oil prices to a near six-month high on Monday, dampening demand in the Asian market, trade sources said.

The 380-cst bunker fuel oil was assessed at $623.75 a tonne on Monday, up $1.75 a tonne from Friday.

Front-line Brent crude rose 48 cents a barrel, or an equivalent $3 a tonne, from Thursday,
Reuters data showed.

“Buyers are still not so active in the market,” said a Singapore-based trader.

Shipowners, sensitive to flat price movements, tend to hold off buying when crude prices are strong.

The outlook for the fuel oil market is mostly dimmed by weaker demand, traders said.

“I don’t think the outlook is bullish. Even if there’s buying from emerging markets for
180-cst, it is the usual load. Bunker demand in the north (South Korea and China) is also just
so-so,” said a North Asian fuel oil trader.

China, a key outlet for the heavy distillate, also saw fuel oil imports in May fall by more
than 30 percent from April.

Absorbing 1.124 million tonnes of fuel oil in May, this was nearly 60 percent lower than the same period last year.

Traders have attributed poorer sales to a lacklustre economy, and the granting of crude
quotas to smaller, independent refineries — also known as teapot refineries.

Instead of refining fuel oil, these teapot refineries have been able to source for their own
crude oil to be used as feedstock.

Like crude oil, fuel oil can be processed to yield lighter products including diesel and
gasoline.

Brent crude was up at around $115 a barrel on Monday, supported by worries about potential disruptions to supply from Iraq where Sunni insurgents took control of strongholds along the border with Syria at the weekend.

*CASH TRADES – No deal.

*TENDER NEWS
India’s Mangalore Refinery and Petrochemicals Ltd is offering 80,000 tonnes of fuel oil for
loading over Aug. 14-16 from New Mangalore. The tender will close on June 25, and remain valid till the next day.
Source: Reuters (Reporting by Jane Xie; Editing by Prateek Chatterjee)