SINGAPORE, May 15 (Reuters) - Asia prompt intermonth spreads for the
May/June 380-centistoke (cst) contract flipped into contango at the session
close on Wednesday, as rising supplies of on specification fuels flowing into
Asia over the next six weeks pressured regional price points.
Around 5.92 million tonnes of fuel oil is expected to arrive from Europe,
the Mediterranean and the Americas in May, up nearly 10 percent versus April and
about 17 percent over the year's monthly average to date.
Around 60 to 65 percent of this supply flow into Asia is expected to be
ready-to-sell marine fuels 380cst.
The May/June 380-cst intermonth timespread was pegged at a discount of 12.5
cents, weakening 75 cents from the previous session when prices were in
backwardation, while the 180-cst premium eased 25 cents.
The cash premium for the 380-cst marine fuels benchmark was valued at 89
cents, down 4 cents from the previous settlement, while the 180-cst closed at 73
cents, down 6 cents from day-ago levels.
But traders were also turning their attention to a new trading cycle and
suggested that while the market remains weak, there could be a floor on the
price slide.
"Lower outright prices typically lift demand and we've seen that since
April. If we start to see inventories of on-spec fuel selling fast then we could
see a drawdown in stocks," a trader said.
"And if June arrivals remain under or around four million tonnes, this could
be a problem for the market ... I guess we'll have to start watching the
Singapore stocks data carefully over the next few weeks."
June arbitrage arrivals are estimated to be around 3.5 million to 4 million
tonnes, the bulk of which is expected to be 380-cst on specification fuels.
* CASH DEALS: No deals
FUEL OIL
CASH ($/T) ASIA CLOSE Change % Change Prev Close
Cargo - 180cst 598.28 -3.91 -0.65 602.19
Diff - 180cst 0.73 -0.06 -7.59 0.79
Cargo - 380cst 591.97 -3.71 -0.62 595.68
Diff - 380cst 0.89 -0.04 -4.30 0.93
Bunker (Ex-wharf)- 380cst 597.50 -4.00 -0.67 601.50
Bunker (Ex-wharf) Premium 5.53 -0.29 -4.98 5.82
SWAPS ($/T) ASIA CLOSE Change % Change Prev Close
(0830 GMT)
Brent M1 102.15 -0.50 -0.49 102.65
180cst M1 603.00 1.37 0.23 601.63
180cst M1/M2 0.75 0.37 97.37 0.38
180cst M2 602.25 1.00 0.17 601.25
Visco M1 6.00 -0.50 -7.69 6.50
Visco M2 6.25 -0.50 -7.41 6.75
380cst M1 597.00 1.87 0.31 595.13
380cst M1/M2 1.00 0.37 58.73 0.63
380cst M2 596.00 1.50 0.25 594.50
Cracks 180-Dubai M1 -6.88 0.22 -3.10 -7.10
Cracks 180-Dubai M2 -6.68 0.19 -2.77 -6.87
East-West M1 27.25 -0.50 -1.80 27.75
East-West M2 28.75 0.25 0.88 28.50
Barges M1 575.75 1.87 0.33 573.88
Barges M1/M2 2.25 1.12 99.12 1.13
Barges M2 573.50 0.75 0.13 572.75
Crack Barges-Brent M1 -14.45 0.08 -0.55 -14.53
Crack Barges-Brent M2 -14.62 0.08 -0.54 -14.70
(Reporting by Luke Pachymuthu; Editing by Himani Sarkar)
