RTRS:Asia Fuel Oil-Cracks extended losses on weak demand
SINGAPORE, Oct 30 (Reuters) - Asia's fuel oil cracks weakened further on
Tuesday, with the front-month November discount widening to its lowest in more
than 17 months, as demand continued to be depressed.
Fuel oil's November crack widened a dollar to a discount of $10.22 a barrel
to Dubai crude, its weakest since May. 11 last year, Reuters data showed.
Traders said that demand from the utility and bunker markets has been
lacklustre, pressuring prices.
Winter temperatures in Japan are expected to be mild, which will likely curb
demand. Furthermore, power plants may also use more liquefied natural gas (LNG)
and coal instead of direct-burning crude and fuel oil.
South Korean demand, on the other hand, was healthy with East-West Power
(EWP) securing its second cargo for November. The utility bought 50,000 tonnes
of high sulphur fuel oil (HSFO), for delivery on Nov. 16-20 to Ulsan, from
Mercuria at a premium of $1.02 a tonne to Singapore quotes, on a
cost-and-freight (CFR) basis.
It last bought a similar cargo for Nov. 1-5 delivery from Mercuria at a
premium of 68 cents a tonne to Singapore quotes, CFR.
Pakistan State Oil bought 325,000 tonnes of HSFO via its recent
tender, but did not award the low sulphur fuel oil (LSFO) cargo as it received
only one offer. Instead, the company has now extended the validity of LSFO
tender to Nov. 4, trade sources said.
PSO also deferred for the second time the closing and validity dates of its
rare term tender to buy 2 million tonnes of HSFO for delivery over a 12-month
period. The tender now closes on Nov. 12, with offers to remain valid until Dec.
31, according to a tender document.
Reflecting the depressed sentiment, fuel oil's prompt November/December
inter-month discount widened to a three-week low of $1.00 a tonne in contango by
the Asian close.
* TENDERS:
- South Korea's East-West Power (EWP) bought 50,000 tonnes of HSFO, for Nov.
16-20 delivery to Ulsan, from Mercuria at a premium of $1.02 a tonne to
Singapore spot quotes, on a cost-and-freight (CFR) basis.
- India's Essar Oil sold 60,000 tonnes of vacuum gasoil (VGO), for
Nov. 12-16 lifting from Vadinar, to BP at a premium of $6.00 a barrel to Dubai
crude, on a free-on-board (FOB) basis.
- Pakistan State Oil (PSO) deferred the validity date of a tender to buy
LSFO. The tender is now valid until Nov. 4.
- PSO also deferred the closing and validity dates of its term tender to buy
2 million tonnes of HSFO for delivery over a 12-month period. The tender now
closes on Nov. 12, with offers to remain valid until Dec. 31.
* CASH DEALS: One 180-cst deal
- Brightoil sold 20,000 tonnes, for Nov. 25-29 loading, to Mercuria at
parity to Singapore spot quotes.
