SINGAPORE: Asia's fuel oil market shrugged off a large inventory build in the Fujairah oil hub with 380-cst cash premiums and 180-cst refining margins to Dubai crude both erasing their weekly loses on Wednesday.
FUJAIRAH INVENTORIES
- In the United Arab Emirates (UAE), the Fujairah Oil Industry Zone (FOIZ) fuel oil inventories jumped 1.354 million barrels, or 11.2 percent, in the week to July 17 to 13.456 million barrels, data via S&P Global Platts showed.
- Fuel oil inventories in the Fujairah oil hub are now at their highest since record keeping began in January.
- Despite rising summer demand, fuel oil inventories in the Fujairah have failed to draw over the past weeks as a result of weaker bunker fuel sales after the recent ban on Qatari-owned and operated vessels from calling at UAE ports, industry sources said.
ARBITRAGE VOLUMES
- Total fuel oil flows into East Asia for July are estimated at just over 5 million tonnes amid below-average arrivals from the West and the Middle East, assessments by Thomson Reuters Oil Research showed.
- However, arrivals are expected to rebound in August, said Thomson Reuters Oil Research, led by stronger inflows from the West that are expected to exceed 4 million tonnes for the month.
- Industry sources said arbitrage volumes from Europe to Asia in June and July have been weighed down by persistent strength in European fuel oil markets as well as elevated Singapore inventories.
- The return of Russian refiners from maintenance season in July and August are expected to help cool the European market, sources said.
CHINA OUTPUT
- China's fuel oil output fell to 2.54 million tonnes in June, down 1.6 percent from the same time last year, official data showed.
- This came amid a 2.3 percent rise in refinery throughput in June at 46.1 million tonnes.
- China's fuel oil production in the first six months of 2017 was at 14 million tonnes, up 0.8 percent from the last year.
WINDOW TRADES
- Two cargo trades were reported in the Platts window, totalling 20,000 tonnes of 180-cst fuel oil and another 20,000 tonnes of 380-cst fuel oil.
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