March 20, 2012 / 12:16 PM / 5 years ago

Asia Fuel Oil-Steady at higher levels

SINGAPORE, March 20 (Reuters) - Asia fuel oil was steady on Tuesday, holding on to gains
from last Friday for a second session amid expectations of tight Western inflows for next month
at less than 2.5 million tonnes.  	
    The second-month May/June timespread held at around $4 a tonne for a third session, after
rising by more than $1 last Friday, on moderate trade volumes of more than 200,000 tonnes for a
third session. 	
    "There's a slight correction today, and the prompt contracts are slightly weaker. It's safe
to say that the market has moved to a higher range and that fundamentals are that little bit
stronger," a Singapore-based Asian trader said.	
    "But fixed-price levels are still as high as they have been, and demand in the physical
market is still poor. The market is still quite tense and players are still bleeding from the
big fall."	
    The market had plunged from a four-month long bull run, which took price levels to multiple
record highs until end-January, with its prompt timespread losing more than 80 percent of its
value in less than two months. 	
    It dropped to a contango of 50 cents a tonne from a peak of about $13 in backwardation,
before recovering to current levels of around $2 at the start of the new April pricing month
last Friday.	
    The fall has largely been precipitated by soaring fixed-price levels, lifted by crude
benchmarks that soared to around $125 a barrel just over a month ago, and has held there since. 	
    The rapid fall has also resulted in a drop in tanker-fixing activity, particularly for
April-arrival Western arbitrage cargoes, with volumes falling below 2.5 million tonnes, the
lowest in more than three years. 	
    The low volumes were also due to players delaying or deferring up to 2 million tonnes of
April arrivals into the following month in a bid to mitigate losses for cargoes that were
purchased at high premium levels. 	
    In line with reduced market activity, no new tanker bookings were seen on Monday. 	
    	
 TENDERS/SPOT     BUY/SELL     GRADE   VOL         LAYCAN         CLOSE/AWARDEE      Valid/PR
                                       ('000T)                                       CE
 ISSUER                                                                                      
 Indian Oil Corp  SELL            380          30  April 2-4      Mitsui             unknown
                                                   (Chennai)                         
 Indian Oil Corp  SELL            380          30  April 12-14    March 22           March 23
                                                   (Chennai)                         
 Indian Oil Corp  SELL            180          15  April 10-12    March 26           March 27
                                                   (Haldia)                          
                                                                                             
 CASH TRADES                                                                                 
 Grade            Seller       Buyer   Vol         Laycan         Price                      
                                                                  (Transaction)      
             380  ENOC         Mercur  20KT        April 4-8      MOPS 380 +$1.00/T          
                               a                                                     
             180  PetroChina   Vitol   20KT        April 4-8      +$2.75/T                   
             380  ENOC         Bright  20KT        April 15-19    MOPS 380 +$1.00/T          
                               il                                                    
             380  Hin Leong    Bright  20KT        April 4-8      $738.00/T                  
                               il                                                    
 	
 FUEL OIL                                                                               
 CASH ($/T)                   ASIA CLOSE     Change  % Change    Prev    RIC
                                                                 Close   
 Cargo - 180cst                      752.63   -2.12       -0.28  754.75  FO180-SIN
 Diff - 180cst                         2.55    0.30       13.33    2.25  FO180-SIN-DIF
 Cargo - 380cst                      739.00   -2.45       -0.33  741.45  FO380-SIN
 Diff - 380cst                         0.85   -0.65      -43.33    1.50  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst           741.00   -1.00       -0.13  742.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium             2.00    1.45      263.64    0.55                 
                                                                                        
 SWAPS  ($/T)                 ASIA CLOSE     Change  % Change    Prev    RIC
                              (0830 GMT)                         Close   
 Brent M1                            124.49   -0.70       -0.56  125.19              
 180cst M1                           749.88   -2.25       -0.30  752.13                
 180cst M1/M2                          2.25   -0.25      -10.00    2.50                
 180cst M2                           747.63   -2.00       -0.27  749.63                
 Visco M1                             12.00   -0.50       -4.00   12.50                
 Visco M2                             12.00   -0.13       -1.07   12.13                
 380cst M1                           737.88   -1.75       -0.24  739.63                
 380cst M1/M2                          2.25    0.12        5.63    2.13                
 380cst M2                           735.63   -1.87       -0.25  737.50                
 Cracks 180-Dubai M1                  -6.64    0.12       -1.78   -6.76                
 Cracks 180-Dubai M2                  -5.87    0.10       -1.68   -5.97                
 East-West M1                         40.00    1.50        3.90   38.50             
 East-West M2                         38.75    1.00        2.65   37.75             
 Barges M1                           709.88   -3.75       -0.53  713.63               
 Barges M1/M2                          1.00   -0.75      -42.86    1.75                
 Barges M2                           708.88   -3.00       -0.42  711.88               
 Crack Barges-Brent M1               -15.43    0.24       -1.53  -15.67                
 Crack Barges-Brent M2               -15.47    0.23       -1.46  -15.70                
 	
	
	
 (Reporting by Yaw Yan Chong and Jasmin Choo; Editing by Jane Baird)

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