Asia Fuel Oil-Cash premiums move sideways amid trading lull

Cash premium on the benchmark 380-cst fuel oil rose by just 15 cents, the smallest gain in nearly a week, as trading was quiet on Thursday – just before the change in the fuel oil pricing formula from the start of August, traders said.

The 380-cst premium stood at $2.90 a tonne to Singapore spot quotes, the highest level since
June 3, Reuters data showed.

After some intense cash trading which saw more than 1 million tonnes of 180-cst fuel oil
change hands earlier this month, there were no deals concluded on Thursday.

BP was the dominant buyer of the less viscous grade, and has on its hands more than 850,000 tonnes of the fuel. Glencore was the main seller.

Traders said this could be the calm before a storm, as players will keep a close watch on
how the roll-over in fuel oil contracts on Friday will impact the market.

Fuel oil supplies from the West into Asia in August are at the lowest level since February,
which have supported rising cargo premiums.

“It will be interesting to watch how the major (BP) disposes of its oil,” said a Singapore-based trader.

In other news, Singapore onshore fuel oil stocks rose 531,000 barrels, or 83,600 tonnes, in
the week to July 30, rebounding to a two-week high, according to data from trade agency IE
released on Thursday.

Both imports and exports slowed, with the former down by 64 percent while the latter more
than halved to 217,800 tonnes.

Shipments from Russia and Saudi Arabia were lower by 73 percent and 66 percent,
respectively, while imports from the United States reached a two-week low.

Exports to China fell to near-zero, after recording around 100,000 tonnes the week before.
Source: Reuters (Reporting by Jane Xie; Editing by Subhranshu Sahu)