GULF PRODUCTS-Fuel oil rises on power demand, run cuts

DUBAI, July 16 (Reuters) - Fuel oil stayed strong on demand for power generation across the Gulf on Thursday amid soaring summer temperatures, while refinery run cuts limited supply. The Gulf is in the season of peak power demand as air conditioning works at full throttle, straining domestic power grids and upping demand for oil products at power plants.

Sentiment is that supply could stay tight for the rest of the year, as Middle East demand combines with strong demand from the Asian bunker sector. OPEC supply cuts have kept the supply of crudes with high fuel-oil yields tight.

ExxonMobil sold 90,000 tonnes of 650-centistoke (cst) fuel oil for loading from Yanbu on July 29-31 to FAL Oil at a narrower discount compared to earlier deals, reflecting strengthening fundamentals in the Asian fuel oil market.

FAL paid a discount of around $8 to $9 per tonne to Singapore spot quotes, on a free-on-board (FOB) basis, for the cargo, the second parcel it won for July delivery. It had paid a discount of $13 per tonne to Singapore spot quotes, FOB, for an earlier cargo loading on July 15-17.

Strong straight-run demand in the Middle East is drawing cargoes from Asia and Europe, traders said. With margins poor across most of the rest of the barrel, refineries have cut runs, limiting supply. Limited supply from India had impacted the market, traders said.

Aramco offered a 90,000 tonne cargo of 180-cst for loading Aug 4.

Singapore onshore fuel oil stocks plunged to a 7-month low in the week ended July 15, highlighting tightening fundamentals. Fuel oil inventories fell 4.367 million barrels to 14.069 million barrels.

GASOLINE