SINGAPORE: Asian fuel oil cash differentials for 380-centistoke inched up 3 cents to a three-session high of a $2.25 premium to Singapore quotes on Friday as healthy demand was expected to offset the surge in inventories in Singapore and Europe.
- "Although refinery outage has resulted in more fuel oil being pushed to the market, the supplies are soaked up as there is demand for it," a trader based in Singapore said.
- Abu Dhabi has previously been selling fuel oil following the shutdown of a gasoline-making unit in January this year because of a fire.
- But overall Middle Eastern supplies may tighten since fuel oil usage in generating power and air conditioning is expected to rise in the summer months.
FLOATING STORAGE
- Independent trading house Mercuria and Chinese state oil giant PetroChina were selling fuel oil stored in vessels off Singapore and southern Malaysia to cash in on strong fuel oil demand from shipping and power sectors.
- This brought the number of tankers storing fuel oil down to three or four compared to an initial eight or nine.
STOCK LEVELS
- Fuel oil stocks held independently at the Amsterdam-Rotterdam-Antwerp (ARA) storage hub surged 67 percent or 380,000 tonnes to a three-week high of 948,000 tonnes, data from consultancy PJK International showed.
- The trend was inline with the massive build-up in Singapore.
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