Asia Fuel Oil-April Western arbitrage arrivals at 3-month high
SINGAPORE, April 4
SINGAPORE, April 4 (Reuters) - East Asia is expected to receive around 4.7 million tonnes of Western fuel oil cargoes in April, the highest since January, a Reuters survey of traders and shipping brokers showed.
This is about 85,000 tonnes, or 1.8 percent, higher than the previous month's shipments, the survey showed.
The higher volumes come at a time when several refineries around Asia and Middle East are taken offline for maintenance, thus keeping supply steady.
April's cargoes consist mainly of high-viscosity, high-density materials, which will help correct the quality imbalance in the market that resulted from large inflows of blendstocks earlier this year.
Reflecting the improving balance, the front-month viscosity spread averaged around $6.60 a tonne since the beginning of March, up from February's average of $3.90 a tonne.
The viscosity spread is the difference between the outright prices of 180-centistoke (cst) and 380-cst fuel oil, and acts as one of the indicators of the blendstock balance in the market.
Fuel oil demand from the marines fuel, feedstock and utility markets has been poor, limiting gains in intermonth spreads.
By the Asian close on Wednesday, the balance April/May intermonth spread fell to a backwardation of 13 cents a tonne, its lowest in nearly a month, according to Reuters data.
4 MLN TONNES BOOKED FOR MAY
A preliminary survey shows that around 4 million tonnes of Western fuel oil have been booked to arrive in East Asia in May, with the window for additional fixtures still open.
PetroChina is again the biggest lifter, fixing 1.085 million tonnes so far to be moved from the Caribbean to Singapore and China.
(Reporting by Lee Yen Nee; Editing by Muralikumar Anantharaman)