Saturday 23 June 2018

Saudi sells early Aug fuel oil from Rabigh

Singapore, July 27, 2009

Saudi Aramco sold 80,000 tonnes of cracked 380-centistoke (cst) fuel oil for early-August loading from Rabigh at higher premiums than earlier deals, reflecting strengthening market fundamentals, traders said on Monday.

Singapore Petroleum Corp (SPC) paid a premium of $3-$4 per tonne to Singapore spot quotes, on a free-on-board (FOB) basis, for the A962 cargo scheduled for loading on Aug. 9, traders said.

Aramco last sold an A962 cargo for July 20-21 loading to French major Total at a discount of $1-$2 a tonne to Singapore spot quotes, FOB.

This compares with the discount of around $8.00 a tonne, FOB, the French major paid for two A962 cargoes that loaded on March 20-24 and April 5-7.

In April, Japan's Itochu paid a discount of around $6.00 per tonne to Singapore spot quotes, FOB, for an A962 parcel loading on April 19-21 from Rabigh.

Aramco is also offering 80,000 tonnes of cracked 380-cst fuel oil for Aug. 20 loading from Jubail, the second cargo offered for loading in August, traders said.

The bids for this parcel are expected by Monday, with a one-day validity.

Last week, Aramco sold a Jubail cargo for Aug 9 loading to an unknown party at near parity to Singapore spot quotes, FOB.

This is higher than a discount of $4.50 per tonne to Singapore spot quotes, FOB, that Shell paid for a Jubail parcel slated to load on July 27.

Aramco's increased fuel oil exports come at a time when market fundamentals are firming.

The product is supported by expectations that supplies will remain tight for the rest of the year on reduced refinery runs, a spillover from the firm Middle East market, and steady demand from the Asian marine fuels sector, the product's largest outlet.

Reflecting this trend, the product's front four timespreads along the forward curve -- August/September, September/October, October/November and November/December -- remain in steep backwardation. – Reuters

Tags: Saudi Aramco | Singapore | Rabigh | fuel oil |

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