Asia Fuel Oil-July/August climbs to highest in two weeks

Fri Jul 13, 2012 8:49am EDT

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SINGAPORE, July 13 (Reuters) - The spread on the Asian fuel oil inter-month
July/August swap rose to a two-week high on Friday as traders made a last push
before the contract was due to expire later in the day.
    The contract rose 88 cents to $4.25 a tonne, the highest since July 2,
Reuters data showed. 
    Total was seen bidding up the contract during the trading window and picked
up 15,000 tonnes of the July/August spread, as well as 50,000 tonnes of the July
and August fixed-price contracts. 
    The European trader also bought 20,000 tonnes of 180-centistoke (cst) at a
high premium of $5.00 a tonne above Singapore spot quotes.
    That was the only deal done during the physical trading window and helped
push up the cash premium for 180-cst to a two-week high of $4.20 a tonne above
Singapore spot quotes, 60 cents higher than the previous session.
    The 380-cst premium, however, eased 5 cents to $3.25 a tonne to Singapore
spot quotes, with bids and offers placed around $1 apart. 
    Despite the strength in the July/August contract, demand was sluggish and
sentiment remained cautious. Singapore marine fuel sales for June fell 8.5
percent from May to a three-month low of around 3.65 million tonnes, official
data showed. 
    Vessel arrival tonnage into Singapore also declined to a three-month low of
186 million gross tonnes (GT), down 11 million GT from the previous month, the
data showed. 
    Demand from teapot refiners in China also remained slow. China's implied oil
demand in June dropped 0.4 percent from the same period a year ago.
 
    Japanese fuel oil purchases also went down in June. Data from the Federation
of Electric Power Companies showed that Japan bought 7.2 million barrels, down 9
percent from May. 
    Reflecting the weakness, the August/September inter-month spread, which
turns prompt on Monday, closed at a four-session low of $2.75 a tonne, 25 cents
lower than the previous session.
    
    **Tenders: Indian Oil Corp was seeking 11,000 tonnes of 180-cst for
delivery Aug. 14-18 to Goa/Kochi via a tender which closes on July 19, with
one-day validity. 
    
    **Cash deals: One 180-cst deal
    - Total bought 20,000 tonnes for Aug. 1-5 lifting from Vitol at a premium of
$5.00 a tonne above Singapore spot quotes.  
    
 CASH ($/T)              ASIA CLOSE  Change  % Change  Prev     RIC
                                                       Close    
 Cargo - 180cst              614.15    8.35      1.38   605.80  FO180-SIN
 Diff - 180cst                 4.20    0.60     16.67     3.60  FO180-SIN-DIF
 Cargo - 380cst              601.40    8.10      1.37   593.30  FO380-SIN
 Diff - 380cst                 3.25   -0.05     -1.52     3.30  FO380-SIN-DIF
 Bunker (Ex-wharf)-          608.00    8.00      1.33   600.00  BK380-B-SIN
 380cst                                                         
 Bunker (Ex-wharf)             6.60   -0.10     -1.49     6.70                  
 Premium                                                        
                                                                                
 SWAPS  ($/T)            ASIA CLOSE  Change  % Change  Prev     RIC
                         (0830 GMT)                    Close    
 Brent M1                    101.52    1.97      1.98    99.55              
 180cst M1                   613.00    8.37      1.38   604.63                
 180cst M1/M2                  4.25    0.87     25.74     3.38                
 180cst M2                   608.75    7.50      1.25   601.25                
 Visco M1                     12.25   -0.03     -0.24    12.28                
 Visco M2                     11.63   -0.50     -4.12    12.13                
 380cst M1                   600.75    8.40      1.42   592.35                
 380cst M1/M2                  3.63    0.40     12.38     3.23                
 380cst M2                   597.13    8.00      1.36   589.13                
 Cracks 180-Dubai M1          -4.21   -0.34      8.79    -3.87                
 Cracks 180-Dubai M2          -4.21   -0.27      6.85    -3.94                
 East-West M1                 36.13    0.25      0.70    35.88             
 East-West M2                 36.13    0.25      0.70    35.88             
 Barges M1                   576.88    8.13      1.43   568.75               
 Barges M1/M2                  4.25    0.87     25.74     3.38                
 Barges M2                   572.63    7.25      1.28   565.38               
 Crack Barges-Brent M1       -13.42   -0.85      6.76   -12.57                
 Crack Barges-Brent M2       -12.97   -0.65      5.28   -12.32                
 
 (Reporting by Lee Yen Nee; Editing by Jane Baird)
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