Asia Fuel Oil Fundamentals soft; Bunker Demand Up
The Asian fuel oil market was steady on Friday with no cargoes traded, though demand seemed improved for the marine fuel oil segment, traders said.
The 180-cst discount widened by 15 cents a tonne, while that of the 380-cst was unchanged, Reuters data showed. While ample supplies were dragging down a market with thin demand, Singapore's marine fuel segment attracted a marginal rise in sales. "Last two days' demand seemed quite okay," a Singapore-based fuel oil trader said.
Marine fuel premiums rose to $2.29 a tonne above cargo prices on Friday, traders said. In other market news, Russia's three-year leading role in supplying fuel oil to China looked shaky as it has been keeping more of the product to process domestically, while Venezuela and Singapore have been ramping up exports to the Chinese market to fill the gap.
Increased competition from Japan and South Korea for Russian straight-run fuel oil (SRFO) also has boosted spot premiums to what some traders say are the highest levels ever, which has encouraged China's independent "teapot" refineries to trim run rates or use cheaper, lower quality fuel oil from Venezuela and Singapore. Idemitsu Kosan Co, Japan's third-largest oil refiner by capacity, said it would shut the 160,000 barrels per day (bpd) crude distillation unit (CDU) at its Hokkaido refinery in northern Japan from late May to early July for scheduled maintenance.
