SINGAPORE: Asia's fuel oil crack for benchmark 180-centistoke fell on Friday for a third straight session on firm oil prices and a possible larger than expected volume of arbitrage cargoes from the West.
The crack dropped a discount of $6.84 a barrel on Friday after reaching its highest in more than three months on Nov. 17.
That came after some traders revised estimates of how much arbitrage cargo would arrive in the East in December.
"We are seeing some difference between traders on how much will arrive in December," said one Singapore-based trader.
"Estimates now vary between 3 and 4 million tonnes, which is a high level," the trader said.
Traders have previously forecast 3.5 million tonnes will arrive in the East next month compared with around 4 million tonnes in November.
Singapore's fuel oil stocks fell to a four-month low of 25.63 million barrels in the week to Nov. 18, official data showed on Thursday.
"Inventories are getting less and less, but it is still at a high level," the trader said.
Arbitrage volumes are likely to remain strong in January with 12 Very Large Crude Carriers and Suexmax tankers so far chartered this month to deliver oil from the West to Singapore at end-December and January, Reuters freight data showed.
"Volumes will continue to flow while demand in the West is not so healthy," said another Singapore trader.
Fuel oil stocks independently held in the Amsterdam-Rotterdam-Antwerp climbed to a record high last week and were more than double the volume held a year ago, data from Dutch consultancy PJK International showed.
That came as demand for bunkers in Singapore appeared to be weakening further from last month, traders said.
Bunker sales in Singapore fell 5.5 percent to 3.64 million tonnes in October compared with the previous month, data last week from the Maritime and Port Authority of Singapore showed.
TENDERS: Korea Western Power Co Ltd (WP) is inviting tenders by Nov. 26 for the supply of 45,000 tonnes of high sulphur fuel oil for delivery at Pyeongtaek between Dec. 13-17, the utility said on its website.
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