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Asia Fuel Oil-Oct/Nov slips further on weak demand

SINGAPORE, Oct 2 (Reuters) - Asia's fuel oil market continued to weaken on Tuesday, with the prompt inter-month spread easing to a six-week low on lacklustre demand at a time when more supply is emerging.

The balance October/November inter-month spread eased 50 cents to a backwardation of $2.38 a tonne, lowest since Aug. 21, according to Reuters data.

Demand from China is unlikely to recover this week as businesses are closed for a week-long public holiday.

Lower demand for diesel, the main output for Chinese refineries, have reduced appetite for straight-run fuel oil, which is used as a feedstock by refiners.

In Japan, summer temperatures seemed to have come off, thus reducing the country's electricity consumption and demand for fuel oil. Power demand in Japan decreased by 0.3 percent in September from a year earlier, Reuters calculations showed.

On the supply end, Asia is expected to receive around 5 million tonnes of Western fuel oil this month, up from last month's 4.6 million tonnes, which will weigh down prices, traders said.

More supply is also seen coming out of India, with around 500,000 tonnes seen so far.

Indonesia's Pertamina is heard to be in a term supply negotiation with Japanese trader Mitsui, whose term contract ended in September. Details of the negotiation were not known.

Fuel oil's refining margin widened to a discount of $6.75 a barrel to Dubai crude, Reuters data showed.

* TENDERS:

- Saudi Aramco sold 105,000 tonnes of A991 cracked high sulphur fuel oil, for Oct. 7-9 loading from Yanbu, to Bakri at an unspecified price.

* CASH DEALS: Two 180-cst deals.

- Vitol sold 20,000 tonnes, for Oct. 21-25 loading, to PetroChina at a premium of $1.50 a tonne above balance October quotes, which is equivalent to around $2.00 a tonne to Singapore spot quotes.

- BP sold 20,000 tonnes, for Oct. 20-24 loading, to PetroChina at a premium of $1.75 a tonne above balance October quotes, which is equivalent to around $2.20 a tonne above Singapore spot quotes.

CASH ($/T) ASIA CLOSE Change % Change Prev RIC Close Cargo - 180cst 666.80 -0.40 -0.06 667.20 Diff - 180cst 1.85 -0.20 -9.76 2.05 Cargo - 380cst 655.60 -0.20 -0.03 655.80 Diff - 380cst 2.10 -0.15 -6.67 2.25 Bunker (Ex-wharf)- 661.00 -1.00 -0.15 662.00 380cst Bunker (Ex-wharf) 5.40 -0.80 -12.90 6.20 Premium SWAPS ($/T) ASIA CLOSE Change % Change Prev RIC (0830 GMT) Close Brent M1 112.14 0.33 0.30 111.81 180cst M1 665.63 -0.25 -0.04 665.88 180cst M1/M2 2.38 -0.50 -17.36 2.88 180cst M2 663.25 0.25 0.04 663.00 Visco M1 11.25 -0.25 -2.17 11.50 Visco M2 12.00 0.00 0.00 12.00 380cst M1 654.38 0.00 0.00 654.38 380cst M1/M2 3.13 -0.25 -7.40 3.38 380cst M2 651.25 0.25 0.04 651.00 Cracks 180-Dubai M1 -6.75 -0.49 7.83 -6.26 Cracks 180-Dubai M2 -6.44 -0.41 6.80 -6.03 East-West M1 37.25 0.25 0.68 37.00 East-West M2 37.00 0.00 0.00 37.00 Barges M1 628.38 -0.50 -0.08 628.88 Barges M1/M2 2.13 -0.75 -26.04 2.88 Barges M2 626.25 0.25 0.04 626.00 Crack Barges-Brent M1 -15.79 -0.29 1.87 -15.50 Crack Barges-Brent M2 -15.41 -0.32 2.12 -15.09

(Reporting by Lee Yen Nee; Editing by)

((lee.yennee@thomsonreuters.com)(+65 6870 3823)(Reuters Messaging: lee.yennee.thomsonreuters.com@reuters.net))

Keywords: MARKETS ASIA/FUELOIL