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Asia Fuel Oil-June/July rebounds; differentials fall
June 5, 2012 / 12:26 PM / 5 years ago

Asia Fuel Oil-June/July rebounds; differentials fall

 SINGAPORE, June 5 (Reuters) - Asia's fuel oil swaps market rebounded on Tuesday, with the
prompt June/July intermonth spread gaining 50 cents to close at $3.75, a day after plunging to a
two-week low.  	
 Volume traded for the contract was substantial, with at least 135,000 tonnes transacted.
Interest was also seen for the second-month July/August spread, with at least 420,000 tonnes
traded, pushing up the spread by 13 cents to close at $2.38 a tonne. 	
 For fixed-price swaps contracts, Brightoil was the biggest buyer of the day, picking up
90,000 tonnes of the June 380-centistoke (cst) contact and 85,000 tonnes of the July 380cst
contact.	
 The Chinese trader also purchased 60,000 tonnes of the July 180-cst contract. 	
 The prompt physical market, however, did not track the strength of the swaps markets.
Differentials for both 180-cst and 380-cst fell for a fifth-straight session to $3.20 and $1.55
a tonne, respectively.	
 Only one deal was done during the physical trading window, with BP selling a 20,000-tonne
parcel to Vitol at a premium of $3.00 a tonne above Singapore spot quotes. 	
 Seasonal summer demand for fuel oil has kicked in, with Pakistan State Oil (PSO) 
seeking 165,000 tonnes of low-sulphur fuel oil (LSFO) and 325,000 tonnes of high-sulphur fuel
oil (HSFO) via tender for delivery over July to September. 	
 The country uses fuel oil for power-generation and demand typically peaks during the summer.
PSO had earlier secured 850,000 tonnes of fuel oil for May-June delivery.	
 South Korea's Western Power (WP) has also issued a tender to purchase 30,000 tonnes of HSFO
for lifting between July 13-17. South Korea is experiencing unusually high temperatures,
prompting the utilities to increase their purchases. 	
 WP usually imports one 30,000-tonne cargo of spot volume every month, but it had earlier
bought 30,000 tonnes for July 5-9 loading from Samsung.    	
 	
 TENDERS/SPOT                                                                                  
 ISSUER          BUY/SELL    GRADE    VOL ('000T)   LAYCAN                   CLOSE (VALID)
 S.Korea/WP      Buy         HSFO     30            July 13-17 (Pyong Taek)  June 12
 Pakistan/PSO    Buy         LSFO     55            July-August (Karachi)    June 19 (June 25)
                                   2x55          August-September
                          HSFO     3x65          August (FOTCO)
                                   2x65          September                                  
                                                                                            
 CASH TRADES                                                                                   
 Grade           Seller      Buyer    Vol           Laycan                   Price
                                                                          (Transaction)
 180cst          BP          Vitol    20KT          July 1-5                 MOPS +$3.00
 	
 	
 CASH ($/T)                  ASIA CLOSE   Change   % Change      Prev     RIC
                                                              Close    
 Cargo - 180cst                   594.65     1.05          0.18   593.60  FO180-SIN
 Diff - 180cst                      3.20    -1.50        -31.91     4.70  FO180-SIN-DIF
 Cargo - 380cst                   579.45     1.95          0.34   577.50  FO380-SIN
 Diff - 380cst                      1.55    -0.20        -11.43     1.75  FO380-SIN-DIF
 Bunker (Ex-wharf)- 380cst        585.00     0.00          0.00   585.00  BK380-B-SIN
 Bunker (Ex-wharf) Premium          5.55    -1.95        -26.00     7.50                  
                                                                                       
 SWAPS  ($/T)                ASIA CLOSE   Change   % Change      Prev     RIC
                          (0830 GMT)                          Close    
 Brent M1                          98.06     1.29          1.33    96.77              
 180cst M1                        592.75     2.75          0.47   590.00                
 180cst M1/M2                       3.75     0.50         15.38     3.25                
 180cst M2                        589.00     2.25          0.38   586.75                
 Visco M1                          14.38     0.50          3.60    13.88                
 Visco M2                          11.88     0.25          2.15    11.63                
 380cst M1                        578.38     2.25          0.39   576.13                
 380cst M1/M2                       1.25     0.25         25.00     1.00                
 380cst M2                        577.13     2.00          0.35   575.13                
 Cracks 180-Dubai M1               -4.34    -0.72         19.89    -3.62                
 Cracks 180-Dubai M2               -4.26    -0.72         20.34    -3.54                
 East-West M1                      39.00    -1.00         -2.50    40.00             
 East-West M2                      37.63    -1.37         -3.51    39.00             
 Barges M1                        553.75     3.75          0.68   550.00               
 Barges M1/M2                       2.38     0.13          5.78     2.25                
 Barges M2                        551.38     3.63          0.66   547.75               
 Crack Barges-Brent M1            -13.23    -0.73          5.84   -12.50                
 Crack Barges-Brent M2            -13.09    -0.75          6.08   -12.34                
 	
  	
	
 	
	
 (Reporting by Lee Yen Nee; Editing by Jason Neely)	
 

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