September 17, 2012 / 11:08 AM / in 5 years

Asia Fuel Oil-380-cst differential at six-month low

SINGAPORE, Sept 17 (Reuters) - Asia's fuel oil market weakened on Monday,
with the cash differentials for 380-cst falling to the lowest in six months as
traders anticipate more supplies arriving from the West. 
    The 380-cst differential dipped 35 cents to a premium of 85 cents, the
lowest since March 15, according to Reuters data.
    Traders said increasing supplies hurt sentiment, and an inventory build-up
is expected to last through the first half of October, as higher volumes of
Western arbitrage inflows are expected. 
    Demand for bunker fuel was also lacklustre, as current high underlying crude
prices have caused outright prices to increase, according to a bunker trader. 
    Bunker sales in August fell to a six-month low of 3.6 million tonnes, 3
percent lower than the previous month, official data showed. 
    Reflecting the weak sentiment in the bunker market, the ex-wharf bunker
differential dropped by more than a dollar to a premium of $4.85 a tonne, lowest
in more than a month, according to Reuters calculations. 
    The bunker differential shows the difference between ex-wharf bunker and
380-cst cargo outright prices.  
    In Japan, fuel oil consumption in August increased to 9.9 million
kilolitres, 25.3 percent higher than July, industry data showed on Friday.
 
    Japan also announced on Friday it intends to stop using nuclear power by
2030s. 
   
    *CASH DEALS: One 180-cst and one 380-cst deals
    - Hin Leong bought 20,000 tonnes of 180-cst, for Oct. 7-11 loading, from
Mercuria at a premium of $2.50 a tonne to Singapore quotes.
    - Vitol bought 20,000 tonnes of 380-cst, for Oct. 7-11 loading, from
Brightoil at $686.50 a tonne. 
  
 CASH ($/T)             ASIA CLOSE  Change  % Change  Prev     RIC
                                                      Close    
 Cargo - 180cst             703.30   -7.40     -1.04   710.70  FO180-SIN
 Diff - 180cst                2.25   -1.35    -37.50     3.60  FO180-SIN-DIF
 Cargo - 380cst             687.15   -5.25     -0.76   692.40  FO380-SIN
 Diff - 380cst                0.85   -0.35    -29.17     1.20  FO380-SIN-DIF
 Bunker (Ex-wharf)-         692.00   -7.00     -1.00   699.00  BK380-B-SIN
 380cst                                                        
 Bunker (Ex-wharf)            4.85   -1.75    -26.52     6.60                 
 Premium                                                       
                                                                              
 SWAPS  ($/T)           ASIA CLOSE  Change  % Change  Prev     RIC
                        (0830 GMT)                    Close    
 Brent M1                   116.73   -0.78     -0.66   117.51              
 180cst M1                  700.38   -5.25     -0.74   705.63                
 180cst M1/M2                 3.50   -0.75    -17.65     4.25                
 180cst M2                  696.88   -4.50     -0.64   701.38                
 Visco M1                    14.63   -0.87     -5.61    15.50                
 Visco M2                    14.00   -0.75     -5.08    14.75                
 380cst M1                  685.75   -4.38     -0.63   690.13                
 380cst M1/M2                 2.88   -0.62    -17.71     3.50                
 380cst M2                  682.88   -3.75     -0.55   686.63                
 Cracks 180-Dubai M1         -6.05   -0.08      1.34    -5.97                
 Cracks 180-Dubai M2         -5.92    0.03     -0.50    -5.95                
 East-West M1                38.25   -0.75     -1.92    39.00             
 East-West M2                37.50   -0.50     -1.32    38.00             
 Barges M1                  662.13   -4.50     -0.68   666.63               
 Barges M1/M2                 2.75   -0.50    -15.38     3.25                
 Barges M2                  659.38   -4.00     -0.60   663.38               
 Crack Barges-Brent M1      -15.29    0.16     -1.04   -15.45                
 Crack Barges-Brent M2      -15.18    0.03     -0.20   -15.21                
 
 (Reporting by Lee Yen Nee; Editing by Alison Birrane)

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