India’s Bharat Petroleum Corp Ltd (BPCL) has sold two second-half December-loading 380-centistoke (cst) fuel oil cargoes totalling 60,000 tonnes via tender amid an improving market, traders said on Friday.

The two 30,000-tonne cargoes, for lifting on Dec. 15-21 from Mumbai and
Dec. 27-31 from Kochi, were respectively sold to Shell and Middle East
trader FAL Oil at discounts of $11.00-$15.00 a tonne to Singapore spot
quotes on a free-on-board (FOB) basis.

“The numbers aren’t fantastic and bidding interest, especially from
Singapore, wasn’t the best. Players here are still reluctant to take in
new stocks and carry the cost into the next year,” a Singapore-based
Asian trader said.

“But sentiment is slowly picking up and that’s quite clear in the
forward swap market. The prompt physical market will catch up in due
course.”

Traders said BPCL extended the validity of the Mumbai-lifting parcel by
a day, due to poor price bids, while the Kochi lot was sold on schedule.

The Indian refiner last sold a similar parcel, for loading Oct. 12-18, Japan’s Marubeni at a discount $4.00-$5.00.

BPCL is a rare spot seller and most of its fuel oil exports are either
termed or provided to its joint-venture company in Singapore with
Germany’s Mabanaft, Matrix-Bharat Marine Services.

The fuel oil market had been depressed by heavy supplies from the
Middle East, particularly from Saudi Arabia and Kuwait, while Western
inflows have also been high at above 3.5 million tonnes for each month
of October to December.

But traders expect the market to strengthen by the next month, on
tighter supplies while traders are more motivated to take aggressive
positions with the start of a new trading book.

The strength is reflected by the product’s cracks, which had held firm
at two-month high levels of above minus $3.00 a barrel for three
straight session since Wednesday, and valued at a discount of $2.84 to
Dubai crude by 0430 GMT.

Source: Reuters

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