SINGAPORE: Time spreads of 380-cst fuel oil on Wednesday recovered some of the previous session's losses that had pushed some spreads contracts to fresh lows, but most traders still see more downside risk than upside potential in February amid steady inflows of the fuel into Singapore during the month.
By contrast, other traders maintained that despite firm February inflows, the recent collapse in the fuel oil market complex from multi-month highs is exaggerated given balanced current inventory levels and steady demand for the industrial fuel.
On the Intercontinental Exchange (ICE), the 380-cst fuel oil Feb/March spreads contract was trading at minus 75 cents a tonne by 1800 Singapore time (1000 GMT), up from Tuesday's settlement of minus $1.50 a tonne, industry sources said.
Discounts of the March/April time spreads were also narrower after gaining 50 cents a tonne from the previous session to minus 50 cents a tonne.
In physical markets, cash differentials of the 380-cst fuel <FO380-SIN-DIF> sank to a near six-month low, dragged down by aggressive supplier offers and limited buying interest, sources said.
Cash discounts of the 380-cst fuel were assessed at minus 88 cents a tonne to Singapore quotes, down 22 cents a tonne from Tuesday's discount of 66 cents a tonne to Singapore quotes, its lowest since Aug. 16.
Three cash deals was reported in the Platts window totalling 40,000 tonnes of 380-cst fuel oil in addition to 20,000 tonnes of the lower viscosity 180-cst fuel.
FUJAIRAH INVENTORIES
In the United Arab Emirates, the Fujairah Oil Industry Zone on Wednesday published its third weekly oil products inventory data via S&P Global Platts.
Inventories of heavy distillates and residues in the storage hub fell 901,000 barrels (about 134,000 tonnes), or 9.8 percent, from the previous week to 8.25 million barrels (or 1.23 million tonnes).
The reported figures include fuel oil and other heavy fuels used for marine bunkers and power generation, but exclude non-energy residual products such as tar and bitumen, according to the S&P Global Platts website.
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