SINGAPORE: Cash premiums of 380-cst fuel oil sagged to a near two-week low after aggressive selling by BP in the Platts window, industry sources said.
Premiums of 380-cst fuel oil were assessed 10 cents lower from the previous session at $2.20 a tonne to Singapore quotes, its lowest premium since Dec. 9.
Five 380-cst fuel oil cargoes were traded in the window on Wednesday totalling 100,000 tonnes, all of which were offered by BP. Hin Leong lifted three of the cargoes while PetroChina picked up the remaining two.
BP's sold its five cargoes at a premium of $2 a tonne above Singapore quotes at the front of the trading window and a $2.25 a tonne premium at the middle and back end of the window.
These premiums were at least 75 cents a tonne lower than the next most competitive offer in Wednesday's window, sources said.
On Tuesday, the company was asking for a premium of $2.50 a tonne above Singapore quotes for similar cargoes across the trading window but failed to find a buyer.
Traders said the narrowing cash premiums were suggestive of an improving supply outlook after weeks of shortages.
Other signs of improving supply-demand balances included the narrowing of prompt month time spreads, shrinking East-West (EW) arbitrage spreads and visco spreads , as well as lower refining margins for the industrial fuel.
For instance, while the January EW spreads were up 50 cents from the previous session on Wednesday, the arbitrage spread has contracted $5.50 a tonne from an 11-month high of $34.25 a tonne reached on Dec. 2.
Comments
Comments are closed for this article.