31 August, 2014 / Ziqa'ad 4, 1435

Oil barrels — File Photo
Oil barrels — File Photo

SINGAPORE: Asia's fuel oil market weakened on Wednesday, with cash premiums easing for the first time in four sessions, while the prompt August/September inter-month spread fell to a three-week low amid a rise in Indian exports.

The front August/September contract, which expires on Wednesday, edged down 50 cents to $2.88 a tonne, its lowest since July 24, according to Reuters data.

The September/October inter-month spread, which turns prompt on Thursday, also weakened to a three-week low. The contract closed 13 cents lower at $2.50 a tonne, Reuters data showed.

Cash premiums for both 180-centistoke (cst) and 380-cst eased for the first time after strengthening for the past three sessions. The 180-cst premium was 20 cents down at $2.80 a tonne above Singapore spot quotes, while the 380-cst premium was 15 cents lower at $2.85 a tonne above Singapore spot quotes.

Rising exports from India weighed on sentiment, at a time when Asia faces high Western arbitrage volumes in August and September.

Western arbitrage arrivals are pegged above four million tonnes for August and September, traders said.

Indian refiners Hindustan Petroleum Corp Ltd and Essar Oil have floated tenders to sell 380-cst. HPCL is offering 35,000-40,000 tonnes for Aug.28-Sept  3 lifting from Mumbai, while Essar is offering 45,000 tonnes for Sept 7-11 lifting from Vadinar.

Saudi Aramco has also issued two tenders to sell 80,000-85,000 tonnes of 650-cst and 225,000-250,000 barrels of VGO respectively, both for loading in August.

On the demand end, Pakistan State Oil is seeking 520,000 tonnes of high sulphur fuel oil (HSFO) and 165,000 tonnes of low sulphur fuel oil (LSFO) for delivery over October-November.

Pakistan typically imports more at the end of the year to meet peak demand for heating during winter.


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