SINGAPORE: Asia's front-month high-sulphur fuel oil crack narrowed its discount to Brent crude on Tuesday for second straight session as crude oil prices continued to fall, trade sources said.
The March 180-cst fuel oil crack to Brent crude was trading at about minus $7 a barrel around the end of Asia trading hours, its narrowest discount since Jan. 3 and compared with minus $7.58 a barrel in the previous session.
Oil fell for a third day on Tuesday, as a rout in global equities triggered losses across bonds and commodities, although the crude price is in positive territory so far this year.
Meanwhile, cash premiums for 380-cst fuel oil cargoes fell to a more than two-week low as suppliers accepted lower premiums for cargoes of the fuel amid limited buying interest for the fuel, sources said.
WINDOW TRADES
- Two cargo trades were reported in the Singapore trading window totalling 40,000 tonnes of 380-cst fuel oil.
- Trafigura bought both cargoes from Glencore at the front of the trading window, lifting the first cargo at a $1 a tonne premium to Singapore quotes, after which it bought the second cargo at a 75 cent per tonne premium, sources said.
- By comparison, on Feb. 1 when 380-cst fuel oil was last traded in the window, buyers paid a premium of $1.25 a tonne to Singapore quotes for cargoes of the fuel.
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TENDERS
- South Korea's Western Power Co (WP) is seeking to import 20,000 tonnes of 540-cst fuel oil with a maximum sulphur content of 2.59 percent into Pyong Taek on Feb. 7-10 in a tender closing on Feb. 6 with same-day validity, the tender document showed.
- WP's prompt import requirement comes after the utility bought 45,000 tonnes of similar quality fuel oil from Mercuria for Feb. 10-19 delivery.
- India's HPCL has offered up to 10,000-15,000 tonnes of vacuum gasoil (VGO) with a maximum 4 percent sulphur content, loading from Mumbai on Feb 13-15, sources said.
- Taiwan's CPC is seeking 36,000 tonnes of 60-cst to 350-cst fuel oil with a maximum 0.3 percent sulphur content for delivery into Keelung on a CFR basis in March, in a tender that is closing on Feb. 6 and is valid until Feb. 8, industry sources said.
- This is CPC's second import tender for an LSFO cargo for March delivery.
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