SINGAPORE: The discount of Asia's fuel oil crack to crude oil widened slightly on Monday but was still "strong" in spite of crude oil prices rising to their highest since July 2015, industry sources said.
The front-month 180-cst fuel oil crack to Brent crude widened its discount by 8 cents a barrel to minus $3.69 a barrel, holding near its five-week high of minus $3.55 a barrel seen on Nov. 2.
At the start of the month, fuel oil cracks rose to a near five-week high on expectations of tightening fuel oil supplies into 2018 amid shrinking output and fewer arbitrage bookings into Asia, as well as firm demand for the industrial fuel.
WINDOW TRADES
- Seven 20,000-tonne cargo trades were reported in the Platts window totalling 140,000 tonnes of 380-cst fuel oil; the highest volume in a week.
- Mercuria was the top buyer of fuel oil cargoes on Monday with four, followed by BP, Hin Leong
and PetroChina with one each.
- Glencore and Vitol each supplied two of the seven cargoes, in addition to one cargo each from Total, Philips66 and Repsol.
- The elevated buying interest in 380-cst fuel oil cargoes lifted cash premiums of the fuel to a near one-month high at $1.81 a tonne to Singapore quotes.
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TENDERS
- Pakistan's PSO finalised its December fuel oil import requirements late last week awarding just three of the nine cargoes it initially sought to import, sources said.
- PetroChina will supply two 65,000-tonne cargoes of 125-cst high-sulphur fuel oil (HSFO) with a 3.5 percent sulphur content at a premium of $16.50-$17.25 per tonne to Middle East 180-cst quotes.
- Vitol will supply 65,000 tonnes of HSFO with similar specifications at a premium of $16.85 per tonne to Middle East 180-cst quotes.
- PSO initially sought to import up to 565,000 tonnes of fuel oil for December delivery through seven 65,000-tonne cargoes of HSFO and two 55,000-tonne cargoes of low-sulphur fuel oil (LSFO).
- Taiwan's CPC is seeking up to 40,000 tonnes of LSFO for import into Keelung, Taichung or Kaohsiung in December in a tender closing on Nov. 6, and valid until Nov. 10, sources said.
INVENTORIES
- Taiwan's Formosa Petrochemical Corp plans to shut a crude oil unit and several secondary units for maintenance at its 540,000-barrel-per-day (bpd) Mailiao refinery in 2018, a company spokesman said on Monday.
- The refinery is planning to shut its No. 3 crude distillation unit with a capacity of 180,000 bpd, its No. 2 residue desulphuriser unit (RDS) with a capacity of 80,000 bpd, its no. 2 residual fluid catalytic cracker (RFCC) with a capacity of 84,000 bpd and a 63,000 bpd diesel hydrotreater.
- The units will be shut for about 40 to 45 days from the first half of March, although some units may take longer to come back online, he said.
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