SINGAPORE, April 11 — Asia’s fuel oil market weakened slightly today, with prices falling due to lower underlying crude benchmarks and cash premiums easing as heavier supplies for next month weighed on the market.
Cash premium for the 180-centistoke (cst) grade slipped 60 cents to US$1.25 (RM3.83) a tonne over Singapore spot quotes, with oil major BP selling physical spot cargoes at a premium of US$1.50 and offering at the same level after.
Western arbitrage volumes into East Asia for May were expected to be over 4 million tonnes, compared to this month’s 2.4-2.5 million tonnes.
Indian refiners also continued to provide supplies, with Essar Oil offering 60,000 tonnes of 380-cst, for April 23-28 loading from Vadinar, via a tender that closes on April 12 and remains valid till the next day.
However, expectations of firm summer demand from Japan and the Middle East ahead would help limit the market’s downside, traders said.
The second-month May/June timespread was heavily traded, with more than half a million tonnes transacted. However, the spread moved within a narrow range to close just 25 cents higher at US$3.38 a tonne and was seen trading lower at US$3.25 after Japan’s weekly imports of low-sulphur fuel oil was higher at 179,263 kilolitres, compared to the previous week’s 90,108 kilolitres, data from the Petroleum Association of Japan (PAJ) showed.
Supplies from Indonesia were also not expected to be affected by the huge earthquake that hit the country’s Aceh provinces, as Pertamina’s fuel depots and facilities in Aceh province are safe and operating normally, the company said in a statement.
However, India’s Chennai port has been shut due to a tsunami watch issued for the whole Indian Ocean. — Reuters