November 8, 2012 / 1:07 PM / 5 years ago

Asia Fuel Oil-Supply dampens sentiment; stocks level up

SINGAPORE, Nov 8 (Reuters) - Asia's fuel oil inter-month spread widened
further on Thursday, hitting its widest contango in two years for the
sixth-straight time, as supply continued to outweigh demand.  
    The balance November/December contract was valued at a contango of $4.25 a
tonne by the Asian close, down 38 cents, according to Reuters data.
    High arbitrage volumes from the West and India propped up Singapore onshore
residual fuel oil stocks for the week to Nov. 7, according to data released by
state trade agency International Enterprise (IE). 
    Stocks rose by 449,000 barrels to a two-week high of 20.92 million barrels,
the data showed.  
    South Korean utilities Western Power (WP) and East-West Power (EWP) came
forward to seek high sulphur fuel oil (HSFO) for the peak winter season. 
    WP is seeking two cargoes of 30,000 tonnes each, for delivery in December to
the port of Pyeongtael, while EWP is looking to buy three cargoes totalling
150,000 tonnes for delivery to Ulsan in December.  
    South Korea shut two of its nuclear reactors on Monday to replace parts
which were supplied with forged quality certificates, and is inspecting all 23
nuclear reactors in the country for problematic parts. 
    Nuclear contributes about 30 percent of South Korea's power needs, and the
closure of the two reactors could cause power shortages. However, the government
is unlikely to import more oil, and will instead take measures to cut
consumption.  
    Fuel oil's prompt December crack rebounded to a three-session high on
Thursday, narrowing by 75 cents to a discount of $9.49 a barrel to Dubai crude,
Reuters assessment showed.
    
    * TENDERS:
    - South Korea's East-West Power (EWP) is seeking three 50,000-tonne cargoes
of HSFO, for delivery on Dec. 1-5, 13-17 and 26-30 respectively to Ulsan, via
tender which closes on Nov. 15. 
    - South Korea's Western Power (WP) is seeking two 30,000-tonne cargoes of
HSFO, for delivery on Dec. 1-5 and 8-12 respectively to Pyeongtaek, via tender
which closes on Nov. 14. 
    - Pakistan State Oil re-issues its tender to buy two 55,000-tonne
cargoes of LSFO for delivery over December-February to Karachi. The tender now
closes on Nov. 14, with offers to remain valid until Nov. 24. 
         
    * CASH DEALS: One 380-cst deal
    - Shell bought 40,000 tonnes, for Nov. 25-29 loading, from Unipec at $590.00
a tonne, which is equivalent to a discount of around $6.40 a tonne to Singapore
spot quotes.
    
 CASH ($/T)             ASIA CLOSE  Change  % Change  Prev      RIC
                                                      Close     
 Cargo - 180cst             604.20  -17.50     -2.81    621.70  FO180-SIN
 Diff - 180cst               -4.00   -0.10      2.56     -3.90  FO180-SIN-DIF
 Cargo - 380cst             593.10  -18.65     -3.05    611.75  FO380-SIN
 Diff - 380cst               -3.80   -0.45     13.43     -3.35  FO380-SIN-DIF
 Bunker (Ex-wharf)-         597.00  -18.00     -2.93    615.00  BK380-B-SIN
 380cst                                                         
 Bunker (Ex-wharf)            3.90    0.65     20.00      3.25                 
 Premium                                                        
                                                                               
 SWAPS  ($/T)           ASIA CLOSE  Change  % Change  Prev      RIC
                        (0830 GMT)                    Close     
 Brent M1                   107.08   -3.44     -3.11    110.52              
 180cst M1                  606.38  -17.62     -2.82    624.00                
 180cst M1/M2                -4.25   -0.37      9.54     -3.88                
 180cst M2                  610.63  -17.25     -2.75    627.88                
 Visco M1                    11.00    1.00     10.00     10.00                
 Visco M2                    11.75    0.50      4.44     11.25                
 380cst M1                  595.38  -18.62     -3.03    614.00                
 380cst M1/M2                -3.50   -0.87     33.08     -2.63                
 380cst M2                  598.88  -17.75     -2.88    616.63                
 Cracks 180-Dubai M1         -9.49    0.75     -7.32    -10.24                
 Cracks 180-Dubai M2         -8.45    0.68     -7.45     -9.13                
 East-West M1                32.25    0.25      0.78     32.00             
 East-West M2                35.50    0.12      0.34     35.38             
 Barges M1                  574.13  -17.87     -3.02    592.00               
 Barges M1/M2                -1.00   -0.50    100.00     -0.50                
 Barges M2                  575.13  -17.37     -2.93    592.50               
 Crack Barges-Brent M1      -18.60    0.77     -3.98    -19.37                
 Crack Barges-Brent M2      -17.32    0.58     -3.24    -17.90                
 
    

 (Reporting by Lee Yen Nee; editing by Keiron Henderson)

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