Asia Fuel Oil-Cash discounts narrow but supplies still weigh

2017-03-16

Asia Fuel Oil-Cash discounts narrow but supplies still weigh

Cash discounts of Asia’s 380-cst fuel oil narrowed away from an 8-month low in the previous session but concerns of ample supplies still weighed as suppliers continued to offer aggressive discounts on cargoes, industry sources said.

Trade activity in physical cargoes dropped back to three trades in the Platts window totalling 40,000 tonnes of 380-cst fuel oil as well as 20,000 tonnes of 180-cst fuel.

On Tuesday, a total of 240,000 tonnes of fuel oil traded in the window through 11 deals. Traders said ample stocks of the industrial fuel are prompting suppliers to place aggressive offers while demand has so far failed to lift cash differentials higher as bullish participants struggled to gain momentum.

By contrast, firm demand bunker fuels demand kept ex-wharf premiums of 380-cst fuel at a near 2-week high of $2.35 a tonne above Singapore quotes. Industry sources said at least one ex-wharf parcel of the 380-cst fuel was sold on Wednesday at $287 a tonne.

Ex-wharf premiums averaged about $1.87 a tonne to Singapore quotes in February and $1.90 a tonne in March so far.

Traders, however, said ample supplies of the shipping fuel would limit the upside potential of ex-wharf premiums in the near term. In the paper market, the Intercontinental Exchange (ICE) traded 380-cst April/May time spread was little changed at about minus 75 cents a tonne by 1800 Singapore time (1000 GMT), industry sources said.

The 380-cst May/June time spread was also little changed on ICE at around 20 cents a tonne despite active trade that saw more than 420,000 tonnes worth of contracts exchange hands by the same time.

Source from : International Shipping News

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