CPC active in Asia’s fuel oil market; Differentials hit new one-month low on weak sentiment

Wednesday, 11 July 2012 01:12 - - {{hitsCtrl.values.hits}}

Ceylon Petroleum Corporation (CPC) has been active in Asia’s fuel oil market as cash differentials fell to a new one-month low on Tuesday, while the August/September intermonth swaps value remained below $3.00 as weak sentiment persisted.

A Reuters report said Sri Lanka’s Ceylon Petroleum Corp (Ceypetco) emerged in the market again to seek 20,000 tons of low sulphur fuel oil (LSFO) and 20,000 tons of high sulphur fuel oil (HSFO) via a tender, after securing 40,000 tons of HSFO in a previous tender.

The refiner shut its 50,000 barrels per day refinery on 2 July for a 35-day planned maintenance, and has been seeking spot cargoes to meet domestic demand.

Cash differential for 180-centistoke (cst) eased 10 cents to a new one-month low of $2.70 a ton above Singapore spot quotes, while the 380-cst differential was unchanged at a one-month low of $2.50 a ton above Singapore spot quotes.

Bids and offers placed during the physical trading window continued to be wide, though two 180-cst and one 380-cst deals were done during the window.

Traders expect the market to remain weak going forward, as demand for marine fuel has slowed and high volumes of Western arbitrage cargoes are expected to arrive in Asia next month.

Marine fuel sales in Singapore peaked in May, hitting an all-time high of almost four million tons. Sales in June are expected to be high as well. “I think June is around that level, if not higher,” said a bunker source.

Data of Singapore marine fuel sales for June is expected to be released by the end of this week by the Marinetime and Port Authority of Singapore.

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