Asia Fuel Oil-Viscosity spread down at near 10-mth low

The price difference between 180-cst and 380-cst cargoes narrowed to a near 10-month low as the strength seen in the typically cheaper 380-cst market was unrivalled by that in the 180-cst grade.

The 180-cst/380-cst price difference, also known as the viscosity spread, stood at 46 cents
a tonne on Wednesday.

It was last lower at minus $1.83 a tonne on Oct. 2, Reuters data showed. FO180-SIN
FO380-SIN

Cash premium, one of the indicators of a market’s relative strength, on the more viscous
380-cst grade spiked to more than a month’s high of $1.60 a tonne to Singapore spot quotes on Wednesday, lifted by firm bids from trading house Glencore.

Glencore’s bids of $1.50 a tonne for the 380-cst grade were not met with any selling
interest.

Though the 380-cst premium was a hefty increase of nearly $1 a tonne from Tuesday, it was still lower than the marine fuel premiums achieved outside of cash trading.

Spot premiums on 380-cst marine fuel grade loaded from terminals, also known as ex-wharf, are at about $5 a tonne to cargo prices, while August term premiums are at about $4 a tonne to cargo prices, traders said.

In tender news, South Korea’s Western Power bought 90,000 tonnes of high-sulphur fuel oil for August arrival, each at a premium of $28 a tonne to Singapore spot quotes, on a
cost-and-freight (CFR) Pyeongtaek basis.

Hyundai Corp will deliver 45,000 tonnes over August 8-12 while Vitol will deliver its cargo over August 27-31, a source from the utility said on Wednesday.

This follows on an earlier purchase of a late July-early August delivery cargo from Vitol at
an undisclosed price.

Over in South Asia, Pakistan State Oil bought 830,000 tonnes of fuel oil for
delivery over August and September in an open tender, traders said on Wednesday.

Increased power demand over the summer season has pushed the state-owned company to buy more fuel oil, a source familiar with the matter said.

PSO bought 650,000 tonnes of high sulphur fuel oil, each 65,000 tonnes, at a premium ranging $27.75-30.49 to Arab Gulf quotes, free-on-board (FOB) Fujairah, traders said.

The state-owned company also bought three 60,000-tonne cargoes of low sulphur fuel oil at
premiums ranging $114.50-115.50 a tonne to Arab Gulf quotes.

*SINGAPORE CASH DEALS: Five 180-cst trades, of which Glencore sold four cargoes.

BP bought from Mercuria 40,000 tonnes for August 7-11 at a discount of $1 a tonne to spot
Singapore quotes over balance July.

Glencore sold to BP 20,000 tonnes for August 8-12 at $594 a tonne.

Glencore sold to Shell 20,000 tonnes for August 10-14 at a discount of $3.50 a tonne to
Singapore spot quotes.

Glencore sold to BP two 20,000 tonne-cargoes for August 8-12 at $594 a tonne.
Source: Reuters (Reporting by Jane Xie; Editing by Anupama Dwivedi)