SINGAPORE: Asia's prompt-month 380-cst high-sulphur fuel oil cash premiums fell to a three-session low on Wednesday as physical trade activity fizzled yet again in the Singapore trading window following sporadic spikes in the buying appetite for fuel cargoes.
Trade activity in the paper market was also muted on Wednesday with fuel oil cracks and spreads little changed from their previous settlements, broker sources said.
Higher fuel oil inventories over the past weeks and steady arbitrage arrivals into Singapore have weighed on market sentiment, bringing cash premiums, time spreads and cracks lower since their recent highs in November.
The 380-cst fuel oil cash premiums slipped to $4.30 a tonne to Singapore quotes, down from $4.90 a tonne in the previous session. Cash premiums on Friday were at a near three-month low of $4.25 per tonne.
ARBITRAGE
- Total fuel oil flows into East Asia for December are expected lower-to-steady versus the previous month's two-year high of about 7.25 million tonnes, with about 6.25 million tonnes assessed so far, assessments by Thomson Reuters Oil Research showed on Tuesday.
- The heavy November arrivals, and expectation of similarly high inflows for this month, have weakened price benchmarks as reflected by the 380-cst Jan/Feb time spread fall to $5-$6 per tonne compared with its prompt balance of Dec/Jan contract, which is still holding near double-digit levels, the assessments said.
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