The May/June timespread, or price difference between May and June loading 380-cst cargoes, widened to a more-than-seven month low as Asian demand waned alongside higher supplies.The May/June timespread widened a discount of $3 a tonne, the lowest since Sept. 19 when it was at minus $3.13 a tonne, Reuters data showed.
A discount is also known as a weak, contango market, where cargoes loading at later dates are more expensive than prompt-loading parcels.
Not only is the marine fuel oil market facing soft demand, requirements for straight run fuel oil in China, Asia's largest economy, is also lower as refineries there undergo maintenance.
"China's product market has been very weak, plus refineries are going under maintenance," said a seller of SRFO to China.
Marine fuel sales in Singapore, the world's largest bunkering port, hit a 13-month low in March, and traders said they have not seen any significant pick up since the slump in February.
In the West, weekly stocks of residual fuel oil were up 1.4 percent to 37.5 million barrels, according to data from the U.S. Energy Information Administration.
*CASH DEALS
BP bought from Hin Leong 20,000 tonnes of 380-cst for May 7-11 at $588 a tonne.
*TENDER NEWS
Indian Oil Corp is offering 30,000-35,000 tonnes of 380-cst fuel oil for loading over May 8-10 from Chennai in a tender that will close on April 21, with validity until the next day.
*MARKET NEWS
Japan's power supply will be tight this summer if all its nuclear reactors remain shut, although blackouts are not expected as long as there are no problems at the thermal fuel plants now providing the bulk of the country's electricity.
Overall, the nine local power monopolies will have a supply surplus of 4.6 percent in August, barely above the 3 percent minimum required, if their nuclear reactors remain shut due to the prolonged safety checks by the nuclear regulator, the trade ministry panel on power projected on Thursday.
Source: Reuters (Reporting by Jane Xie; Editing by Joyjeet Das)
