RTRS:Asia Fuel Oil-Cracks widen further amid ample supply
SINGAPORE, Oct 31 (Reuters) - Asia's fuel oil market
extended losses on Wednesday, with cracks hitting a new 17-month
low, as current demand is insufficient to absorb ample supply in
the market.
The front-month November crack widened by another 24 cents
to a discount of $10.46 a barrel to Dubai crude by the Asian
close, lowest since May. 11, according to Reuters data.
Fuel oil's inter-month spreads also weakened further, with
the contango structure extending into the January/February
contract. The prompt November/December discount widened by 25
cents to a more than three-week low of $1.25 a tonne.
Indian Oil Corp and Taiwan's CPC Corp
came forward to offer cargoes, adding to an already
amply-supplied market.
"(The market) is very weak now, supply keeps coming in but
current demand levels cannot absorb all these cargoes," a trader
said.
Reflecting the depressed sentiment, IOC sold a mid-November
loading cargo at a steeper discount to Vitol through its recent
tendeer.
The company sold 35,000 tonnes of the 380-centistoke (cst)
fuel oil, for Nov. 13-15 lifting from Chennai, at a discount of
around $18.00-$19.00 a tonne to the IOC formula, which takes the
average of Platts and Argus' assessments.
This is lower than what it fetched for a similar cargo it
sold for early-November lifting, which went to oil major BP at a
discount of around $6.00 a tonne to the IOC formula.
On the demand end, Sri Lanka's Ceylon Petroleum Corp
(Ceypetco) is seeking 20,000 tonnes of high sulphur fuel oil
(HSFO) and 20,000 tonnes of low sulphur fuel oil (LSFO) for
delivery in November.
The requirement is due to a shutdown of the country's sole
50,000 barrels-per-day refinery for two weeks from Oct. 26,
exhausting its supply of mainly Iranian crude oil.
In Japan, inventory of low sulphur C-type fuel oil was up
0.4 percent to 0.89 million kilolitres in the week to Oct. 27,
data by the Petroleum Association of Japan showed.
Stocks of high sulphur C-type fuel oil, on the other hand,
was down 0.7 percent to 1.58 million kilolitres for the week.
* TENDERS:
- Sri Lanka's Ceylon Petroleum Corp (Ceypetco) is seeking
20,000 tonnes of HSFO and 20,000 tonnes of LSFO, for Nov. 27
delivery, via tender which closes on Nov. 6, with a three-day
validity.
- Taiwan's CPC is offering 35,000 tonnes of straight-run
LSFO, for lifting in second-half of November, via tender which
closes on Nov. 1, with a one-day validity.
- Indian Oil Corp (IOC) is offering 30,000-35,000 tonnes of
380-cst, for Nov. 22-24 lifting from Chennai, via tender which
closes on Nov. 1, with a one-day validity.
- IOC sold 35,000 tonnes of 380-cst, for Nov. 13-15 lifting
from Chennai, to Vitol at a discount of $18.00-$19.00 a tonne to
the IOC formula, which takes the average of Platts and Argus'
assessments.
* CASH DEALS: Three 180-cst deals
- Shell sold two cargoes of 20,000 tonnes, for Nov. 15-19
loading, to Mercuria at $627.00 a tonne.
- Chevron sold 20,000 tonnes, for Nov. 15-19 loading, also
to Mercuria at $627.00 a tonne.
