SINGAPORE: Asia's fuel oil spot premiums improved on Monday, with 380-centistoke (cst) grade differential climbing to its highest in four weeks, on expectations of lower supplies from the West for the coming month.
Singapore trader Hin Leong was seen placing strong bids of around a premium of $3.00 a tonne to Singapore spot quotes for the 380-cst grade during the physical trading window.
Only one deal was transacted though, with Chevron selling 20,000 tonnes of 380-cst to oil major Shell at a premium of $2.75 a tonne.
The purchase, however, is unlikely related to the unexpected shutdown of a gasoline-making fluid catalytic cracker (FCC) at the oil major's 500,000 barrels-per-day (bpd) Singapore refinery earlier in the day.
Strong interest was also seen in the swap market, with over 300,000 tonnes traded for the front-month April/May timespread.
Despite the heavy volumes, the contract traded within a pretty narrow range to close at $3.13, up 25 cents from the previous session, by 0830 GMT, and easing to trade at $3.00 a tonne after.
Western arbitrage volumes from the West for April is expected to be low, with under 3 million tonnes booked so far.
Tanker-fixing activity for May-arrival cargoes had initially picked up last week but saw a quiet start with no new bookings seen for the day.
Some demand support was seen from South Korea, with Western Power purchasing 30,000 tonnes of high-sulphur fuel oil (HSFO), for April delivery, from SK Energy at $770.00 a tonne on cost-and-freight (CFR) basis.
Taiwan's Formosa Petrochemical Corp was seen offering 15,000 tonnes of pyrolysis fuel oil (PFO), for April 5-7 lifting from Mailiao, with the cargo to be awarded on March 26.
In the Middle East, Libya's state oil company has issued a tender to sell 45,000 tonnes of straight-run fuel oil from its Zawiya refinery.
The cargo is for loading in mid-April, and the tender is due to close on March 28, a trader said.
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