RTRS:Asia Fuel Oil-Weakens further, margins at month-low
SINGAPORE, May 11 (Reuters) - Asia's fuel oil market
weakened further on Friday, as the fall in outright prices
outpaced the loss seen for underlying crude amid a well-supplied
market.
Refining margins widened to a discount of more than $5.00 a
barrel, its lowest since April 10, as fixed-price contracts lost
more than $8.00 a tonne, with Brent crude over a dollar lower.
Some demand was seen from the Philippines, with 30,000
tonnes exported to there this week according to International
Enterprise (IE) data, as Royal Dutch Shell 110,000
barrels-per-day Tabangao refinery in Batangas, Philippines, is
undergoing planned maintenance.
Details on the maintenance work at Pilipinas Shell,
including the units affected and duration of shutdown, were not
available, but sources said it began sometime between late April
and early May.
However, the market remains amply supplied, with Singapore
inventory at four-week high levels.
Despite a Very Large Crude Carrier (VLCC), the Pacific Glory
carrying fuel oil, ran aground outside of Singapore port limits
on May 8, there was no damage or spillage, sources said.
Operations to discharge the ship's cargo has also since
commenced, while vessel traffic at Singapore port remains
unaffected, the sources added.
On top of rising supplies, the market is faced with slightly
bearish demand factors.
China's oil demand in April posts its first fall in three
years as its economy cools, with net fuel oil imports at a
three-month low of 1.36 million tonnes. Refinery daily run
rates, at 8.99 million barrels per day (bpd) were at the lowest
since October 2011.
Shipowners are also worried about the origin of their bunker
supplies, fearing that they could be violating impending EU
sanctions against Iran without even knowing it, leaving them
vulnerable to being blacklisted, the managing director of
leading industry group Intertanko said on Friday.
Vessels ranging from tankers to dry bulk vessels to
containers run the risk of falling foul of the sanctions every
time they refuel, because fuel from various origins - including
Iran - are blended at trading hubs, Katharina Stanzel, who takes
her role in July, told Reuters.
