SINGAPORE: Fuel oil's January viscosity spread, the differential between 180-cst and 380-cst prices, plunged $1.88 a tonne on Wednesday to around a 14-month low of $6.88 according to traders.
BP was seen as the main seller of January viscosity while Hess Corp was actively snapping up offers at around $7.00 a tonne.
Other sellers of the January viscosity contract included Kuo Oil who sold 25,000 tonnes worth at $7.00 a tonne during the Asia trading window.
Similar drops were also seen for the February and March viscosity spreads. The February contract fell $1.63 to $8.88 a tonne while the March contract dropped 25 cents to $10.25.
BP offloaded a total of 90,000 tonnes of January fixed-price 180-cst swaps and bought 25,000 tonnes of January fixed-priced 380-cst swaps during the Asia trading window.
The major also sold a 20,000-tonne physical 180-cst fuel oil cargo for Jan.28-Feb.1 lifting at a discount of $3.75 a tonne to Mercuria, the lowest since Dec. 10, 2012 according to Reuters data.
Fuel oil timespreads were also mostly lower by 1030 GMT with the prompt January/February contract dropped 25 cents to its lowest since Dec. 4, 2012 at a $4.50 a tonne contango.
Physical fundamentals for the Asia fuel oil market has been weak since October 2012 because of lacklustre demand for marine bunker fuel and consecutive months of heavy arbitrage inflows.
Center>Copyright Reuters, 2013