Vitol buys fuel oil from Saudi Aramco
Singapore, August 19, 2009
Saudi Aramco sold 80,000 tonnes of 380-cst cracked fuel oil for September 7 lifting from Jubail to Vitol at a much higher premium versus earlier deals, and offered another cargo for September 23 loading, traders have said.
Vitol paid a premium of $1-$2 per tonne to Singapore spot quotes, on a free-on-board (FOB) basis, for the cargo, much higher than a discount of around $4 per tonne it paid for a similar parcel loading tomorrow.
Prior to that, BP had bought a Jubail cargo that loaded on August 9 at a small discount to Singapore spot quotes, FOB, while Shell had paid a discount of $4.50 per tonne, FOB, for a parcel that loaded on July 27, according to a report in our sister newspaper Gulf Daily News.
'At that kind of price, that cargo has to stay in the Gulf region, as demand over there continues to hold firm, largely due to the peak summer demand season,' said a Singapore-based fuel oil trader. East Africa is also drawing barrels away from the Middle East and contributing to the shortage, partly due to the power generation needs during the summer, traders said.
Aramco is offering another Jubail cargo for September 23 lifting via private negotiations. This offer will close today, with bids remaining valid until tomorrow.