Asia Fuel Oil-SK Energy purchase boosts 380 cst

Wed Jan 30, 2013 6:28am EST

SINGAPORE, Jan 30 (Reuters) - Asian 380-centistoke (cst) fuel oil
differential rose to a three-week high on Wednesday, as SK Energy's buying
during the physical trading window provided support to the higher viscosity
grade. 
    The differential for 380-cst gained $1.10 to a premium of 40 cents a tonne
to Singapore spot quotes, the highest since Jan. 8, Reuters assessment showed. 
    This is also the first time the 380-cst differential slipped into positive
territory in three weeks, according to Reuters data. 
    Cash differentials represent the amount buyers are willing to pay below or
above published benchmark prices.  
    SK Energy bought 60,000 tonnes of 380-cst fuel oil during the physical
trading window, bringing its total purchase since last month to 280,000 tonnes. 
    Trade sources said these cargoes are likely to be sold into the bunker
market or to utilities, as power generation demand rose due to a winter that is
colder than usual. 
    The relatively healthier demand for the higher viscosity grade has also had
an impact on fuel oil's viscosity spreads, with the prompt February contract
narrowing to a three-session low of $4.75 a tonne by the Asian close. 
    Market sentiment, however, remained depressed as Western arbitrage arrivals
are expected to be high through February, prolonging a supply overhang that
started in October last year. 
    Reflecting the weak sentiment, the prompt February/March contango widened by
38 cents to $3.25 a tonne by the Asian close. 
    Fuel oil's front-month February crack widened 31 cents to a discount of
$10.20 a barrel Dubai crude, Reuters data showed. 
    
    * TENDERS:
    - Thailand's Bangchak Petroleum is offering 30,000 tonnes of low
sulphur waxy residue (LSWR), for Feb. 26-28 lifting from Sriracha, via tender
which closes on Jan. 30, with a one-day validity.  
    
    * CASH DEALS: Two 380-cst trades
    - Vitol sold 20,000 tonnes, for Feb. 19-23 loading, to SK Energy at a
premium of $1.00 a tonne to February average quotes, which is equivalent to a
premium of around 75 cents a tonne to Singapore spot quotes.
    - Gunvor sold 40,000 tonnes, for Feb. 18-22 loading, to SK Energy at a
premium of $1.00 a tonne to February average quotes, which is equivalent to a
premium of around 80 cents a tonne to Singapore spot quotes.
    
 CASH ($/T)             ASIA CLOSE  Change   % Change  Prev     RIC
                                                       Close    
 Cargo - 180cst             639.70     3.30      0.52   636.40  FO180-SIN
 Diff - 180cst               -4.60    -0.10      2.22    -4.50  FO180-SIN-DIF
 Cargo - 380cst             639.40     5.00      0.79   634.40  FO380-SIN
 Diff - 380cst                0.40     1.10   -157.14    -0.70  FO380-SIN-DIF
 Bunker (Ex-wharf)-         639.00     4.00      0.63   635.00  BK380-B-SIN
 380cst                                                         
 Bunker (Ex-wharf)           -0.40    -1.00   -166.67     0.60                  
 Premium                                                        
                                                                                
 SWAPS  ($/T)           ASIA CLOSE  Change   % Change  Prev     RIC
                        (0830 GMT)                     Close    
 Brent M1                   114.38     0.92      0.81   113.46              
 180cst M1                  643.50     3.25      0.51   640.25                
 180cst M1/M2                -3.25    -0.38     13.04    -2.88                
 180cst M2                  646.75     3.63      0.56   643.13                
 Visco M1                     4.75    -0.50     -9.52     5.25                
 Visco M2                     7.00    -0.63     -8.20     7.63                
 380cst M1                  638.75     3.75      0.59   635.00                
 380cst M1/M2                -1.00    -0.50    100.00    -0.50                
 380cst M2                  639.75     4.25      0.67   635.50                
 Cracks 180-Dubai M1        -10.20    -0.31      3.13    -9.89                
 Cracks 180-Dubai M2         -9.66    -0.26      2.77    -9.40                
 East-West M1                25.25    -1.00     -3.81    26.25             
 East-West M2                29.75    -0.50     -1.65    30.25             
 Barges M1                  618.25     4.25      0.69   614.00               
 Barges M1/M2                 1.25     0.13     11.11     1.13                
 Barges M2                  617.00     4.13      0.67   612.88               
 Crack Barges-Brent M1      -19.46    -0.29      1.51   -19.17                
 Crack Barges-Brent M2      -18.55    -0.27      1.48   -18.28                
 

 (Reporting by Lee Yen Nee; Editing by William Hardy)
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