Asia fuel oil: CPC offers second low-density cargo for May

Thursday, 25 April 2013 01:25 - - {{hitsCtrl.values.hits}}

SINGAPORE (Reuters): State-owned Ceylon Petroleum (Ceypetco) has put up for sale a second high-sulphur fuel oil cargo for export in May through a tender, industry sources said on Wednesday.

The refiner is offering a 20,000 tons low-density cargo of 180-centistoke (cst) for loading in mid-May, traders said.

It had previously sold an early May loading cargo of 180-cst to a Southeast Asia based trader at a premium of around $ 4 to $ 5 a ton to the Singapore 180-cst benchmark, traders said.

Ceypetco had typically in the past purchased Low-Sulphur Fuel Oil (LSFO) from the international market, but this year, following a switch from Iranian Light to Oman crude at its 50,000 barrels per day (bpd) refinery, its residual yield has increased, industry sources said.

Fuel oil yield for Oman crude being processed at a simple refinery is typically around 46% versus Iranian Light which is around 40%, traders and refinery sources said.

“In the past Oman crude running through a complex refinery would typically produce a medium-sulphur fuel oil, with sulphur at around 2% and density at 0.92,” a veteran fuel oil trader said.

“This is pretty good quality, so they’ve had a track record of high-quality residual yield.”

The 20,000-ton cargo is expected to receive considerable interest from traders seeking low-density blending components, which has been in short supply here in Asia.

“I expect to see this cargo make its way to Singapore’s blending pool. Premiums should hold firm especially since delivery is fairly prompt,” a Singapore-based trader said.