Elevated trading activity in the physical fuel oil market in the Singapore window saw cash premiums of the 380-cst high-sulphur fuel oil rise on Monday, snapping three straight sessions of declines. Sentiment in the paper markets also improved at the start of the week with the near-dated fuel oil time spreads and cracks firming on Monday, recovering some of the losses seen in the previous week, broker sources said. The stronger cracks come despite rising Brent crude prices which broke past $60 a barrel on Friday on support among the world’s top producers for extending a deal to rein in output and as the dollar retreated from three-month peaks.

WINDOW TRADES

– Nine cargo trades were reported in the Platts window, totalling 140,000 tonnes of 380-cst fuel oil and 40,000 tonnes of 180-cst fuel oil.

– Monday’s deal volume was the highest since Oct. 5 when 280,000 tonnes of the fuel were traded through 11 cargoes.

– Hin Leong was the top buyer of cargoes on Monday, lifting 100,000 tonnes of 380-cst fuel oil, followed by Vitol which purchased the remaining 80,000 tonnes.

– Mercuria topped the suppliers list with 80,000 tonnes, followed by Total and Gunvor, each of which sold 40,000 tonnes, and Shell which sold 20,000 tonnes.
MARGINS

– South Korea’s S-Oil Corp said on Monday that profits from refining crude oil would stay strong for the next couple of years due to a tight outlook for supply.

– “Strong refining margins will be sustained for the next couple of years given a tight supply-demand balance outlook on the back of persistently slow capacity expansions,” the refiner said in an earnings statement.

– Asian refining margins have averaged $7.35 a barrel so far in October, up from $5.98 per barrel in October last year.

TENDERS

– Pakistan’s PSO is seeking to import up to 565,000 tonnes of fuel oil for December delivery.

– The tender seeks up to seven 65,000 tonne cargoes of high-sulphur fuel oil (HSFO) and up to two 55,000-tonne cargoes of low-sulphur fuel oil (LSFO).

– PetroChina, Vitol and Bakri were among the top contenders for the HSFO cargoes, submitting their offers at a premium range of $16.50-$18.60 a tonne to Middle East 180-cst quotes on an FOB basis, sources said.

– Vitol submitted the lowest offers for one of the LSFO cargoes, asking for a premium of $51.60 a tonne to Middle East 180-cst quotes on a CFR basis, while PetroChina offered the second cargo at a premium of $54 a tonne, source said.

– PSO’s tender closed on Oct. 25 and remains valid until Nov. 1.

– South Korea’s Hyundai Oilbank is seeking a term tender to meet its bunker fuels demand in 2018 in a tender that closed on Oct. 27, sources said.

– The company is seeking anywhere between 70,000-160,000 tonnes of 180-cst and 380-cst bunker fuel for delivery either in Singapore on an FOB basis, at Daesan and Ulsan in South Korea on a CFR basis, or at Daesan on a CFR basis and at Ulsan on an ex-tank basis, sources said.

– In addition to the above quantities, the company is also seeking 50,000-80,000 tonnes of 380-cst fuel oil ex-wharf Singapore.

ASSESSMENTS FUEL OIL CASH ($/T) ASIA CLOSE Change % Change Prev Close

RIC Cargo – 180cst 355.57 9.28 2.68 346.29 Diff – 180cst 0.89 0.14 18.67 0.75

Cargo – 380cst 350.92 9.07 2.65 341.85 Diff – 380cst 1.24 0.18 16.98 1.06

Bunker (Ex-wharf)- 352.75 9.25 2.69 343.50 380cst

Bunker (Ex-wharf) 1.83 0.18 10.91 1.65 Premium

Source: Hellenic Shipping News.