dubai: cash differentials of asia's 380-cst fuel oil fell to a near two-week low on tuesday despite a second consecutive session of active trading in the platts window, casting further doubt over bullish trading strategies for march.
"doesn't look like the play is gaining much traction, there aren't enough bulls to lift the market," said a singapore-based fuel oil trader, who added that suppliers of the fuel are continuing to overwhelm buyers.
"the bears are taking the bulls by the horns," said a second trader.
traders also pointed out that buying activity in the window on tuesday was not aggressive enough to lift cash differentials higher and that some buyers seemed to be taking advantage of depressed price levels.
"it's mostly bids getting hit only a few offers are lifted," a third trader said.
a total of 260,000 tonnes of fuel oil traded in the window on tuesday through 12 deals, including 240,000 tonnes of 380-cst fuel and 20,000 tonnes of 180-cst fuel, industry sources said.
petrochina, the lead buyer of the 380-cst fuel on tuesday, snapped up four cargoes while bp, mercuria and hin leong each took another two cargoes and china aviation oil bought one.
since the start of march, petrochina has bought 500,000 tonnes of 380-cst fuel oil through the platts window.
suppliers of the 380-cst fuels were led by lukoil with four cargoes, followed by glencore and total which supplied three cargoes each, and shell with one cargo.
trafigura was the sole buyer of the 180-cst fuel, which was supplied by bp.
cash discounts of the 380-cst fuel slipped to a near two-week low at $1.22 a tonne below singapore quotes, down from minus 52 cents a tonne in the previous session.
in the paper markets, sentiment continued to weigh on the prompt month time spreads.
the balance-of-march/april time spreads for the 380-cst fuel slipped into a 50 cent per tonne contango, down from a 25 cent a tonne backwardation in the previous session.
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