Asia Fuel Oil-Widens further, Nov/Dec at over 2-year low

SINGAPORE, Nov 7 (Reuters) - Asia's inter-month fuel oil spread reached its
widest contango in two years on Wednesday as more supplies were expected to come
into the market soon and concerns about weak demand persisted.
The balance November/December contract widened 38 cents to a contango of
$3.88 a tonne by the Asian close, the widest contango since Oct. 8, 2010,
according to Reuters data.
Taiwan's Formosa Petrochemical Corp issued a tender to sell 40,000
tonnes of high sulphur fuel oil (HSFO) and 10,000 tonnes of pyrolysis fuel oil
(PFO) for late-November loading. The tender closes on Nov. 9, with bids to
remain valid on the same day.
Indian Oil Corp is also set to award a 15,000 tonne cargo of
180-centistoke (cst) fuel oil by the end of the day.
China's biggest operator of teapot refineries, ChemChina, is set to win an
annual crude import quota of 10 million tonnes starting from 2013, according to
industry sources.
ChemChina operates five teapot refineries, and they will be the first such
refiners to have legal access to crude imports, a market currently dominated by
the two major refineries, Sinopec and PetroChina. A JP Morgan note said this
could increase China's exports of light products, while suppressing its fuel oil
imports.
"Should ChemChina choose to substitute crude for fuel oil as feedstock,
China's fuel oil imports may remain low. China's fuel oil imports averaged 370
kbd in 3Q 2012 versus about 500 kbd in 1H 2012, contributing to recent weakness
in fuel oil cracks," the note said.
Fuel oil's prompt December crack hit a fresh one-week low on Wednesday,
widening by 17 cents to a discount of $10.24 a barrel to Dubai crude, Reuters
assessment showed.
In Japan, stocks of low sulphur C-type fuel oil in the week to Nov. 3 fell
by 2.6 percent from the previous week to 0.86 million kilolitres, data by the
Petroleum Association of Japan (PAJ) showed.
High sulphur C-type fuel oil inventories also fell during the week to 1.56
million kilolitres, down 1.3 percent week-on-week, according to the data.

* TENDERS:
- Indian Oil Corp is offering 15,000 tonnes of 180-cst for Nov. 26-28
lifting from Haldia via a tender closing on Nov. 7.
- Taiwan's Formosa Petrochemical Corp is offering 40,000 tonnes of HSFO and
10,000 tonnes of PFO for Nov. 21-23 lifting from Mailiao via a tender that
closes on Nov. 9, with a same-day validity.
- Saudi's ExxonMobil is offering 80,000 tonnes of 650-cst for Nov. 29-Dec. 2
lifting from Yanbu via a tender that closes on Nov. 8.

* CASH DEALS: No deals reported

CASH ($/T) ASIA CLOSE Change % Change Prev RIC
Close
Cargo - 180cst 621.70 18.30 3.03 603.40 FO180-SIN
Diff - 180cst -3.90 -0.20 5.41 -3.70 FO180-SIN-DIF
Cargo - 380cst 611.75 17.30 2.91 594.45 FO380-SIN
Diff - 380cst -3.35 -0.45 15.52 -2.90 FO380-SIN-DIF
Bunker (Ex-wharf)- 615.00 18.00 3.02 597.00 BK380-B-SIN
380cst
Bunker (Ex-wharf) 3.25 0.70 27.45 2.55
Premium

SWAPS ($/T) ASIA CLOSE Change % Change Prev RIC
(0830 GMT) Close
Brent M1 110.52 3.17 2.95 107.35
180cst M1 624.00 18.25 3.01 605.75
180cst M1/M2 -3.88 -0.38 10.86 -3.50
180cst M2 627.88 18.63 3.06 609.25
Visco M1 10.00 1.12 12.61 8.88
Visco M2 11.25 0.25 2.27 11.00
380cst M1 614.00 17.12 2.87 596.88
380cst M1/M2 -2.63 -1.25 90.58 -1.38
380cst M2 616.63 18.38 3.07 598.25
Cracks 180-Dubai M1 -10.24 -0.17 1.69 -10.07
Cracks 180-Dubai M2 -9.13 -0.18 2.01 -8.95
East-West M1 32.00 -1.00 -3.03 33.00
East-West M2 35.38 0.88 2.55 34.50
Barges M1 592.00 19.25 3.36 572.75
Barges M1/M2 -0.50 1.50 -75.00 -2.00
Barges M2 592.50 17.75 3.09 574.75
Crack Barges-Brent M1 -19.37 -0.44 2.32 -18.93
Crack Barges-Brent M2 -17.90 -0.18 1.02 -17.72

(Reporting by Lee Yen Nee; editing by Jane Baird)