Asia fuel Dips to 11-Year Low
Asia fuel oil falls to 11-yr lows on expectations of Western arbitrage inflows.
Fuel oil prices fell for a fifth consecutive session, dropping to 11-year lows amid expectations of significant Western arbitrage inflows in January and no signs of a reduction in the oversupply of crude oil.
Asia fuel oil prices are now at levels not seen since January 2005. Differentials however remained unchanged from yesterday's trading. Activity was typically quiet for this time of year, but the market is looking weaker, said one Singapore-based trader. "We expect more downside in fuel oil prices given the large arbitrage inflows expected in January."
Despite the weakening prices of both 180-cst and 380-cst, ex-wharf premiums have been strengthening over the past week. Singapore's onshore inventory of fuel oil edged 1.22 percent or 336,000 barrels lower to a two-week low of 27.238 million barrels, data from Singapore's International Enterprise showed.
Meanwhile, India's Hindustan Petroleum Corp Ltd (HPCL) sold a 30,000 tonne cargo of high-sulphur fuel oil for Dec. 23 to 25 loading to Glencore (GLCNF) at a discount of $20.90 to Singapore quotes, traders said. This could not be immediately confirmed by either buyer or seller.
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Glencore sold 20,000 tonnes of 380-cst high-sulphur fuel oil to Hin Leong for Jan. 12-16 loading at a discount of $3.00 per tonne to the average of January Singapore quotes.