SINGAPORE: Asia's fuel oil inter-month spreads weakened across its 12-month forward curve on Thursday, as heavy supplies and thin demand continued to weigh on sentiment.
The prompt October/November inter-month spread lost 50 cents to a backwardation of $2.38 a tonne, the lowest in more than a month, according to Reuters data.
Demand remained subdued at a time when the market is seeing a slew of supplies coming out of the West and India.
This has also put pressure on margins, with the front-month October margin falling to its weakest in more than a week.
Naphtha's inter-month spreads extended gains in early trade, with the October/November contract climbing to a two-week high of $8.50 a tonne in backwardation on tightening supplies.
Strong European margins have limited exports to Asia, where demand is firm as crackers are running at maximum capacity, thus lifting prices.
Asia is due to receive around 350,000 tonnes of Western naphtha in October, down from 800,000 tonnes this month.
The gasoil market also continued to be supported by healthy buying interest.
Fixed-price swaps for products strengthened, except gasoil, with Brent crude gaining 37 cents to $109.96 per barrel by 0430 GMT from Wednesday's Asian close.
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