Asia Fuel Oil-Premiums move sideways on muted demand

Fuel oil premiums moved sideways on Tuesday while the market faced muted demand from both the marine fuel segment and cash trading for cargoes.

The 180-cst premium was down 25 cents a tonne to 42 cents a tonne to Singapore spot quotes, while the 380-cst differential rose from parity to 27 cents a tonne, Reuters data showed.

Despite a fall in crude prices that would typically encourage more demand from shipowners, who are sensitive to flat price movements, bunker fuel enquiries were few.

“I thought demand should be better, but it seems not. I guess they are holding back,” said a
marine fuel trader.

There were also no deals done during cash trading either.

In North Asia, demand for oil as a power generation fuel has scaled back significantly.
Japan’s requirements for direct-burn crude and fuel oil this summer will be 10-20 percent lower from a year ago due to thin power demand, and utilities raising their reliance on coal, a
cheaper alternative.

Oil slipped below $114 a barrel on Tuesday, retreating further from a nine-month high, as
concerns eased that escalating violence in Iraq will affect supplies from OPEC’s second-largest oil producer.
Source: Reuters (Reporting by Jane Xie; Editing by Prateek Chatterjee and Anand Basu)