Cash premiums of Asia’s 380-cst high-sulphur fuel oil jumped on Tuesday as players took charge in the Platts window for a second consecutive session, setting the stage for a bullish trading strategy in April after stalled attempts in March.

WINDOW TRADES

– Seventeen 380-cst fuel oil cargoes traded in the Platts window totalling 380,000 tonnes, the most window trades since March 1 when 22 deals were reported.

– A total of 660,000 tonnes of 380-cst fuel oil have already traded in the window since the start of April.

– An anticipated trading play in March stalled amid abundant physical supplies and a sharp sell-off in time spreads early in the month. – Expectations of fewer fuel oil supplies into Asia in April and May make a bullish trading strategy in April more feasible, traders said.

– Cash premiums for the 380-cst fuel were 15 cents a tonne higher from the previous session at 34 cents a tonne above Singapore quotes, the highest level since March 1.

TIME SPREADS

– Reflecting market sentiment, the 380-cst fuel oil market structure on the Intercontinental Exchange (ICE) traded higher across most of the 2017 curve.

– The ICE-traded 380-cst April/May time spread flipped into backwardation of 5 cents a tonne, by 1830 Singapore time (1030 GMT), up 35 cents a tonne from the previous session.

– The 380-cst May/June time spread was trading at parity, up from minus 5 cents a tonne in the previous session.

TENDERS

– Pakistan’s PSO is seeking up to 520,000 tonnes of 180-cst high-sulphur fuel oil for delivery in June through eight 65,000-tonne cargoes for delivery into Port Qasim, as well as two 55,000-tonne cargoes of 170-cst low-sulphur fuel oil for delivery at the Keamari terminal in Karachi. The tender closes on April 25 and is valid until May 6.

– The UAE’s ADNOC is offering up to 340,000 tonnes of straight-run fuel oil for delivery in May through four 85,000-tonne cargoes loading at Ruwais. The tender closed on April 3.

Source: Reuters