Asia Fuel Oil-Viscosity spread down at more than four-month low

The price difference between the 180-cst and 380-cst swaps fell for the third straight session on Tuesday and hit a more than four-month low amid heavy selling of the 180-cst paper swaps, sources said.

The price difference, also known as a viscosity spread, stood at $5 a tonne on Tuesday, down 75 cents a tonne from Monday, Reuters data showed.

While there were no physical cargoes traded, a significant volume of paper trades were
concluded on Tuesday, with Glencore on the sell-side and BP a buyer, sources said.

“Looks like one (Glencore) is trying to narrow the viscosity spread and the other (BP) is
trying to widen it,” said a Singapore-based trader.

By offering 180-cst paper at competitive prices, the viscosity spread may be narrowed, and
vice versa.

In other market news, sales of marine fuel in Singapore, the world’s largest bunkering hub,
hit a three month low in June, in line with fewer vessels calling at the port for bunkers,
according to data from the Maritime and Port Authority of Singapore (MPA).

Total bunker sales volume for June stood at 3.37 million tonnes, down 7 percent on month and was 3 percent lower than the same month last year.

Vessel arrivals for bunkers were down nearly 7 percent on month to 3,074.

Traders had expected softer sales numbers due to soaring crude prices in June, when
geopolitical tensions in North Africa and the Middle East emerged.

Prices of the ex-wharf 380-cst marine fuel oil averaged $610.76 a tonne, 2 percent higher
than May’s average of $597.58 a tonne, Reuters data showed. BK380-B-SIN

Ship owners, the main buyers of 380-cst as shipping fuel, are sensitive to movements in the
fuel’s flat prices, which are linked to crude values.
Source: Reuters (Reporting by Jane Xie; Editing by Anupama Dwivedi)