Asia Fuel Oil: Poor Demand Pressures 380-cst Premium
The cash premium on the 380-cst fuel oil fell to a near one-week low as lacklustre marine fuel demand this week outweighed a supply shortfall from the West in June.
The 380-cst premium was at $1.58 a tonne to Singapore spot premiums, down 92 cents, Reuters data showed. Bunker traders expect marine fuel sales in May to ease from April, which reached the highest
level since May 2012. Official data from the Maritime Port Authority of Singapore is expected to be released next week.
"It has been very quiet," said a Singapore-based marine fuel seller. Another Singapore-based trader said some market players are also rich in supplies, thus pressuring premiums. "They know that the market is full of oil," the trader said. Despite lower supplies from the West in June, inventory levels in Singapore were still relatively high at about 21.06 million barrels or 3.3 million tonnes, data from trade agency IE Singapore showed on Thursday.
Shipments to China hit a six-week low of 16,700 tonnes, about 10 times less than the volumes last week, IE data showed. Overall exports slid more than 20 percent from last week. In other market news, South Korea's GS Caltex Corp has unexpectedly shut down its 60,000-barrel-per-day (bpd) hydrocracker for under a week, although the exact cause of the closure was not known, traders familiar with the matter said on Thursday.
The hydrocracker, which processed vacuum gasoil and located in the southwestern city of Yeosu, is expected to halt operations for between four and five days, traders said. The impact on the market is expected to be limited due to the short period of the shutdown, they said.
Reporting by Jane Xie