SINGAPORE: Fuel oil supply slated to arrive in Asia in August from the West is expected to fall to its lowest level since February, though any upside to the market would be offset by lacklustre demand, sources said on Wednesday.
An estimated 2.7 million tonnes of fuel oil should reach Asia in August from Europe and the Americas, 10 percent less that in July, Reuters analysis of shipping data showed. .
While volumes into Asia's trading hub have fallen below the 3-million-tonne level for the second consecutive month, premiums have been rangebound amid the tight supply due to thin demand.
About 90 percent of Asia's volumes, or 2.43 million tonnes, will land in Singapore.
Premiums on the benchmark 380-cst averaged 75 cents a tonne to Singapore spot quotes to date in July, versus 96 cents a tonne in June.
Sales of marine fuel in Singapore, the world's largest bunkering hub, hit a three-month low in June of 3.37 million tonnes, down 7 percent on month and were 3 percent lower than the same month last year.
Asia will receive about 1.73 million tonnes (64 percent) from the United States and the Caribbean; 560,000 tonnes (21 percent) from the Black Sea and 410,000 tonnes (15 percent) in August.
JULY ARBITRAGE
About 3.02 million tonnes of fuel oil will arrive in Asia this month, relatively unchanged from initial estimates of 3.09 million tonnes.
Of the total, 2.22 million tonnes, or 74 percent, will make a landfall in Singapore.
Three vessels were diverted to China and South Korea from Singapore, including Unipec's Achilleas and PetroChina's Nave Galactic that landed in China and Ottoman Nobility that arrived in South Korea.
The charterer for the latter vessel was not known.
Around 1.89 million tonnes (63 percent) of fuel oil will be from the United States and Caribbean, 520,000 tonnes from Europe (17 percent), 480,000 tonnes from the Black Sea (16 percent), and 130,000 tonnes (4 percent) from the Baltic.
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