SINGAPORE: Asia's fuel oil market was stable in thin trading on Friday even as cash differentials for 180- and 380-cst high sulphur fuel oil narrowed slightly.
Three trades for 380-cst fuel were reported in the Platt's windows compared with 12 bids and 19 offers for the same grade. There were no trades for 180-cst high sulphur fuel.
Narrowed cash differentials should indicate firmer demand for bunkers amid lower arbitrage inflows, but thin physical trading volumes indicated traders were still adopting a wait-and-see attitude, traders said.
"We are waiting for the market to show direction," said one Singapore-based trader.
"While oil prices are range-bound they have see-sawed all week, gaining one day and losing the next which makes it difficult to make the right call when it comes to trading fuel oil," the trader said.
Uncertainty over future prices was limiting forward sales of fuel in the coming months.
"I heard from a broker there is 200,000 on offer on February and March prices but the volume traded on-screen so far is pathetic - only 35,000 tonnes," a second trader said.
That came amid expectations of a rebound in fuel imports from the West which could put downward pressure on fuel oil prices, traders said.
"I believe the current level of cash differentials will be short-lived," the second trader said.
At least 2.25 million tonnes is currently due to arrive from the West in the next two months according to Reuters Eikon ship chartering data.
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