Asia Fuel Oil: Market Brightens on Tight January Supply
Asia's fuel oil market strengthened on Wednesday trading as discounts for both 180cst and 380cst fuels narrowed markedly amid tightening supply.
In addition to lower discounts on spot cargos, Singapore ex-wharf 380cst term contracts for January switched to a premium, traders said, pointing towards a healthier market. Singapore's onshore inventories of fuel oil dropped more than 2 million barrels to a four-week low of just under 25 million barrels in the week to Dec. 29, according to data from
International Enterprise Singapore.
Although swaps are faring better than a few weeks ago, traders said that they are still under pressure due to the expected arbitrage inflows in the second half of January and early February. "From the second half of January and into February, we see more cargo coming through, and so there might be some softness in the market value," said another Singapore trader.
SINGAPORE CASH DEALS:
- Glencore sold 20,000 tonnes of 380cst high-sulphur fuel oil to Coastal for Jan. 14-18 loading for $161.50 per metric tonne.
Reporting by Roslan Khasawneh
