Asia Fuel Oil-Prices ease; Cracks, timespreads firm
SINGAPORE, June 29 (Reuters) - Asia fuel oil cargo prices eased on Monday, after reaching near-eight month highs late last week, but cracks and timespreads firmed, thanks to healthy bunker demand in Asia and the Middle East.
The market's fundamentals have been underpinned by steady marine fuel sales from the region, particularly Singapore, the world's top bunkering port. The bunker industry is the largest outlet for fuel oil in Asia.
Lower marine fuel exports from Iran and Iraq, partly due to the summer peak demand season, have also contributed to a tighter Middle East market and caused bunker premiums in the world's third-largest refuelling port of Fujairah to more than double.
But expectations of higher Western inflows in July and August are expected to limit the market's gains.
Western fuel oil cargoes arriving in Asia in July are likely to rise 27-32 percent to 3.2-3.3 million tonnes from June, while August inflows could come in around or above the average monthly volume of 3.0 million tonnes, traders and shipping brokers said.
This comes after two months of tight supplies, they added.
* CRACKS: Cracks firmed to minus $7.10 a barrel from minus $7.25 a barrel on Friday.
* SWAP SPREADS: The July/August 180-cst backwardation jumped to $2.50 a tonne from $2.25 a tonne, while the 380-cst backwardation widened to $4.25 a tonne from $3.75 a tonne. <ASIA/SWAP/FUEL>
* CASH DEALS: BP bought 20,000 tonnes of 180-cst fuel oil for July 14-18 lifting from Petrobras at a premium of $2.50 a tonne to Singapore spot quotes, and another cargo for July 25-29 loading from Vitol at a premium of $1.50 a tonne to July average prices.
Kuo Oil also bought 20,000 tonnes of 180-cst fuel oil for July 14-18 lifting from Vitol at a premium of $2.50 a tonne to Singapore spot quotes. SPOT LSWR LSWR-SIN 56.00/57.00 56.50 0.00 SPOT FO 180 CST FO180-SIN 402.75/403.15 412.45 -9.50 SPOT FO 380 CST FO380-SIN 399.60/400.00 408.50 -8.70 JUL FO SWAPS FO-1M-S 400.75/401.25 410.00 -9.00 AUG FO SWAPS FO-2M-S 398.25/398.75 407.75 -9.25 SINGAPORE BUNKER BK380-B-SIN 408.00/410.00 411.00 -2.00 (Reporting by Jennifer Tan; Editing by Keiron Henderson)
