Fuel oil and bunkers

Two spot deals were concluded in the afternoon trading window in Singapore. Gunvor sold to Cargill a 40,000t 380cst HSFO cargo for 26-30 June loading at July average +$3.50/t. Glencore sold to Vitol a 20,000t cargo of 180cst HSFO for 1-5 July loading at Mops +$2.75/t. Bids outnumbered offers by 11 to eight. The prompt 180/380cst viscosity spread widened to $11.25/t, from $10.75/t previously.   

In the paper market, June swaps rose by $22.75/t to trade at $616.25/t. The prompt fuel oil margin against Dubai crude strengthened by $0.27/bl to a discount of $2.43/bl. The prompt time spread widened by $1.75/t to $3.25/t in backwardation.

Taiwan’s Formosa Petrochemical offered to sell 12,000t of pyrolysis fuel oil (PFO) through a tender for loading during 25-27 June on a fob Mailiao basis. Bids are to be submitted by 13 June. An earlier parcel for loading during 14-16 May was awarded to Vitol at a premium of $90-$100/t to Singapore spot prices. Formosa typically offers 10,000-20,000t cargoes of PFO each month. PFO is a cutter stock commonly used for blending down high-viscosity cargoes.

Indian refiner Essar Oil offered 60,000t of vacuum gasoil (VGO) through a tender for loading from Vadinar during 2-6 July. This tender closes on 12 June. An earlier parcel for 21-25 June loading was sold to Vitol. VGO can be used as a feedstock for further refining into lighter cuts of fuel.

PetroChina placed the VLCC Xin Yong Yang on subject to load 275,000t of HSFO on 30 June from the Caribbean to head to Singapore. The high viscosity content of Caribbean cargoes often requires further blending to meet bunker grade specifications. The straight-run fuel oil market was largely devoid of activity in Europe. With European demand remaining weak, shipments of M100 were seen moving east. Japanese trader Toyota placed the Daqing 455 on subject to load 40,000t of M100 straight-run fuel oil during 13-14 June from the Russian port of Nakhodka for north China at $420,000.