Singapore oil swaps rose on Monday, taking a cue from stronger US crude futures, but fuel oil's discount to Middle East Dubai crude deepened under the weight of heavy supply. Brokers quoted February fuel oil at $198 a tonne, up from $195.60 on Thursday. Singapore oil markets were closed for a public holiday on Friday. Traders said Singapore fuel oil market continued to face heavy 180-centistoke supplies despite some buying activities from China.
Singapore's weekly fuel oil stocks stayed above 11 million barrels as second-half January arrivals started to flow in.
Fuel oil's February crack to Dubai weakened to minus $9.70 a barrel from minus 8.70 on Thursday and March crack also lost $1.00 to minus $9.40 a barrel. Brokers pegged February gas oil $1.85 stronger than Thursday at $51.60 a barrel and its February premium to Dubai held steady at $11.20 a barrel.
Traders said firm NYMEX heating oil futures helped support the Asian gas oil market on to nagging worries of a cold snap to strain supplies in the US Northeast, the world's largest heating oil market.
Temperatures in the US Northeast were seen rising to near to below normal by Tuesday, said private forecaster Meteorlogix.
NYMEX February heating oil was up 1.83 cents to $1.4020 a gallon by 0442 GMT, while NYMEX crude futures for February delivery rose 48 cents at $49.01 a barrel, extending a gain of $1.22 on Friday.
Asian regrade, or the price difference between jet-kerosene and gas oil, narrowed to $2.50 from $2.85 for February, mainly due to firmer gas oil swaps.
Traders said jet-kerosene was likely to be bullish this week as chilly temperatures were bolstering demand in Japan and could push the country to import more jet-kerosene on a spot basis. Japan uses kerosene as winter heating oil.
"The problem is the main supplier, South Korea, has run out of export availability because temperatures are just as cold in the country," a trader said.