Asia Fuel Oil-Demand steady; outright prices fall
Saturday, 19 May 2012 | 00:00
Asia's fuel oil market was steady on Friday, with buying by BP and Brightoil providing most of the support.
Oil major BP picked up two 380-centistoke (cst) cargoes and one 180-cst cargo during the physical trading window, while Brightoil bought the other three 380-cst cargoes.
Demand was also seen coming from South Korea, with utility East West Power issuing a tender to seek 100,000 tonnes of high sulphur fuel oil for June delivery.
The utility had earlier secured around 120,000 tonnes for May and June, more than double its
normal monthly requirement, as an unusually hot summer boosts power generation needs.
Industry sources said a lower price environment, caused by weaker underlying Brent crude, encouraged activity.
Outright prices for the 180-cst fell by almost $20.00 to a six-month low of $654.03, while the 380-cst price fell to a five-month low of $642.54 a tonne.
Activity in the swaps market was brisk, with around 200,000 tonnes of 180-cst fixed-price contract traded, while 325,000 tonnes of the 380-cst fixed-price contract changed hands.
Chinese trader Brightoil continued its bull play, picking up another 55,000 tonnes of the June 180-cst contract and 245,000 tonnes of the 380-cst contract for June.
The bunker market was relatively quiet despite the lower price levels, as many players chose
to stay on the sidelines, anticipating that prices could drop further.
India's Mangalore Refinery and Perrochemicals extended the closing date of its June 9-11 loading cargo tender, possibly to attract better bids.
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