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Asia Fuel Oil-Eases on heavier supplies ahead
April 16, 2012 / 1:00 PM / 6 years ago

Asia Fuel Oil-Eases on heavier supplies ahead

SINGAPORE, April 16 (Reuters) - Asia's fuel oil newly prompt
intermonth spread slipped on Monday, losing more than 50 cents a
tonne, as expectations of heavier supplies ahead weighed on the
market. 	
    The May/June backwardation, which is the price premium
between the May and June swaps contracts, lost 63 cents to close
at $3.13 a tonne and traded lower at $3.00 after, amid
conservative volumes of slightly over 100,000 tonnes.	
    Activity in the physical spot window was also slightly
lacklustre, with no deals done and bids/offer wide apart.	
    Lower usage of fuel oil for power generation in the U.S. and
Europe, due to warmer-than-average winter temperatures, had
resulted in increasing number of cargoes been diverted eastward
to Japan to help accommodate the only solid growth centre for
fuel oil, Barclays said in a note on Monday.	
    U.S. trader Cargill was seen provisionally chartering the
Evridiki to move 140,000 tonnes from Rotterdam sometime in
April, a shipping source said.	
    Taiwan's Formosa Petrochemical Corp sold 40,000 tonnes of
high-sulphur fuel oil (HSFO), for April 27-29 lifting from
Mailiao, to Mercuria at a discount of $60.00-$65.00 a tonne to
Singapore spot quotes on free-on-board (FOB) basis.	
    The reason for the steep discount was due to its poor
quality, industry sources said.	
    "It's a high-density cargo, and its viscosity is also higher
than the standard 380-cst grade," a trade source said.	
     The discount on Formosa's HSFO 380-centistoke cargoes
normally do not exceed $30.00 a tonne.  	
     However, the market continues to find support as strong
Middle East demand competes with East Asia for volumes, with
India's Essar Oil selling 60,000 tonnes of 380-cst, for April
23-28 lifting from Vadinar, to Middle East trader Bakri at an
undisclosed price.	
    The cargo is slated for the Fujairah market, as supplies in
the region are expected to tighten due to summer power
generation demand.	
    The East Asia market also received a slight boost as
Vietnam's Petrolimex has purchased 90 percent of the 180,000
tonnes it sought for the second quarter.	
    Up until last week, the state-owned firm had only bought up
about half of 180,000 tonnes, with traders unconvinced it will
pick up all the volumes sought. 	
    Prices paid for the Spec C and 380-cst grades were between a
premium of $1.50-$2.50 a tonne, a premium of $15.00 a tonne for
Spec A and a premium of $20.00 a tonne for Spec K, sources said.	
	
 TENDERS/SPOT     BUY/S  GRADE  VOL     LAYCAN        CLOSE/AWA  Valid/PRICE
                  LL            ('000T                DEE        
 ISSUER                                                                     
 Taiwan/Formosa   SELL   HSFO   40      April 27-29   Mercuria   -$60/-$65/T
                                        (Mailiao)                
 India/Essar      SELL   380    60      April 23-28   Bakri      unknown
                                        (Vadinar)                
                                                                            
 CASH TRADES                                                                
 No deals                                                                   
 	
 FUEL OIL                                                                                  
 CASH ($/T)                     ASIA CLOSE     Change  % Change    Prev    RIC
                                                                   Close   
 Cargo - 180cst                        724.35   -9.80       -1.33  734.15  FO180-SIN
 Diff - 180cst                           0.50   -0.05       -9.09    0.55  FO180-SIN-DIF
 Cargo - 380cst                        715.35   -9.85       -1.36  725.20  FO380-SIN
 Diff - 380cst                           1.60   -0.10       -5.88    1.70  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst             720.00    0.00        0.00  720.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium               4.65    9.85     -189.42   -5.20                  
                                                                                           
 SWAPS  ($/T)                   ASIA CLOSE     Change  % Change    Prev    RIC
                                (0830 GMT)                         Close   
 Brent M1                              119.77   -1.23       -1.02  121.00              
 180cst M1                             723.13   -9.62       -1.31  732.75                
 180cst M1/M2                            3.13   -0.62      -16.53    3.75                
 180cst M2                             720.00   -9.00       -1.23  729.00                
 Visco M1                               10.13    0.00        0.00   10.13                
 Visco M2                               10.38   -0.12       -1.14   10.50                
 380cst M1                             713.00   -9.63       -1.33  722.63                
 380cst M1/M2                            3.38   -0.75      -18.16    4.13                
 380cst M2                             709.63   -8.87       -1.23  718.50                
 Cracks 180-Dubai M1                    -4.70    0.08       -1.67   -4.78                
 Cracks 180-Dubai M2                    -4.82    0.02       -0.41   -4.84                
 East-West M1                           40.00   -1.50       -3.61   41.50             
 East-West M2                           39.00   -1.25       -3.11   40.25             
 Barges M1                             683.13   -8.12       -1.17  691.25               
 Barges M1/M2                            2.13   -0.37      -14.80    2.50                
 Barges M2                             681.00   -7.75       -1.13  688.75               
 Crack Barges-Brent M1                 -15.00    0.04       -0.27  -15.04                
 Crack Barges-Brent M2                 -15.09    0.14       -0.92  -15.23                
 	
 (Reporting by Jasmin Choo and Lee Yen Nee; Editing by James
Jukwey)

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