SINGAPORE, Oct 5 (Reuters) - Asia's fuel oil market plunged further onMonday, with the prompt inter-month spread sinking to its lowest in nearly twoyears amid abundant supply of the 180-centistoke (cst) fuel oil.
The balance October/November contract dipped $1.75 to a contango of $1.25 atonne, according to Reuters data.
A contango price structure is when prompt prices are weaker than forwardprices. This is the first time the prompt contract has flipped into negativeterritory in seven months, Reuters data showed.
Asia is due to receive around 5 million tonnes of Western fuel oil thismonth, of which most of the cargoes consist of the lower viscosity grade. "Interms of supply, we certainly see more than last month, but this is as much of ademand issue too," a trader said.
The prompt viscosity spread, which represents the balance of blendstock inthe market, fell to a three-month low of $10.00 a tonne by the Asian close onlower 180-cst prices.
The weakness in the market could see some upside when utilities and refinersstart stockpiling for the winter.
Sri Lankan refiner Ceylon Petroleum Corp has emerged in the spot market toseek 20,000 tonnes of high sulphur fuel oil (HSFO) and 20,000 tonnes of lowsulphur fuel oil (LSFO).
South Korean utility Western Power (WP) has also issued a tender to buy30,000 tonnes of HSFO for November delivery. The utility has bought two30,000-tonne parcels for August and September from Mitsui at a premium of$32.00-$33.00 a tonne.
- Sri Lanka's Ceylon Petroleum Corp (Ceypetco) is seeking 20,000 tonnes ofhigh sulphur fuel oil (HSFO) and 20,000 tonnes of low sulphur fuel oil (LSFO),for Oct 27 delivery, via tender which closes on Oct 16, with a 72-hour validity.
- South Korea's Western Power (WP) is seeking 30,000 tonnes of high sulphurfuel oil, for Nov. 3-7 delivery to Pyongtaek, via tender which closes on Oct.15.
- India's Mangalore Refinery and Petrochemicals Ltd
is offering80,000 tonnes of 380-cst, for Nov. 9-11 lifting from New Mangalore, via tenderwhich closes on Oct. 11, with a one-day validity.
- India's Bharat Petroleum Corp Ltd
sold 30,000 tonnes of 380-cst,for Oct 23-27 lifting from Kochi, to Marubeni at a discount of $17.00-$18.00 atonne to Singapore spot quotes, on a free-on-board (FOB) basis.
- Indian Oil Corp
sold 30,000-35,000 tonnes of 380-cst, for Oct.23-25 loading from Chennai, to BP at a discount of $5.00-$10.00 a tonne to theIOC formula, which is the average of Platts and Argus' assessment.
* CASH DEALS: No tradesCASH ($/T) ASIA CLOSE Change % Change Prev RICCloseCargo - 180cst 629.85 -27.45 -4.18 657.30Diff - 180cst -1.50 -1.00 200.00 -0.50Cargo - 380cst 639.00 -8.60 -1.33 647.60Diff - 380cst -0.25 -1.10 -129.41 0.85Bunker (Ex-wharf)- 635.00 -17.00 -2.61 652.00380cstBunker (Ex-wharf) -4.00 -8.40 -190.91 4.40PremiumSWAPS ($/T) ASIA CLOSE Change % Change Prev RIC(0830 GMT) CloseBrent M1 110.81 -1.35 -1.20 112.16180cst M1 640.00 -18.00 -2.74 658.00180cst M1/M2 -1.25 -1.75 -350.00 0.50180cst M2 641.25 -16.25 -2.47 657.50Visco M1 10.00 -0.75 -6.98 10.75Visco M2 11.00 -0.75 -6.38 11.75380cst M1 630.00 -17.25 -2.67 647.25380cst M1/M2 -0.25 -1.75 -116.67 1.50380cst M2 630.25 -15.50 -2.40 645.75Cracks 180-Dubai M1 -8.31 -1.07 14.78 -7.24Cracks 180-Dubai M2 -7.79 -1.01 14.90 -6.78East-West M1 34.50 -2.50 -6.76 37.00East-West M2 34.75 -2.25 -6.08 37.00Barges M1 605.50 -15.50 -2.50 621.00Barges M1/M2 -1.00 -1.50 -300.00 0.50Barges M2 606.50 -14.00 -2.26 620.50Crack Barges-Brent M1 -17.50 -0.80 4.79 -16.70Crack Barges-Brent M2 -16.81 -0.74 4.60 -16.07
(Reporting by Lee Yen Nee; Editing by William Hardy)
Keywords: MARKETS ASIA/FUELOIL