FOB Singapore 180 CST HSFO cash money differential slips to discount on weak demand
The cash money differential for FOB Singapore 180 CST high sulfur fuel oil to Mean of Platts Singapore 180 CST HSFO continued to be at a discount of $0.25/ mt Wednesday, January 7, unmodified from Tuesday and a 23-week low, after it fell $1.83 day on day Tuesday, on flagging local need.
The cash differential was last lower on July 30 at minus $1.95/ mt Platts information revealed.
website connected the rate decrease to weaker local need for the utility-grade product.
The lower-viscosity fuel oil-- which makes up much less than 2% of total aquatic gas sales in Singapore, the world's biggest bunkering location-- discovers demand from the utility market regionally.
Pakistan State Oil, a major regional customers of 180 CST HSFO for supply to the country's residential energy companies, has avoided buying the lower-viscosity gas oil grade for the very first quarter of 2015.
The state-owned company acquired 325,000 mt of 180 CST HSFO in five 65,000-mt parcels for Q4 2014.
"The firm deferred acquiring [180 CST HSFO] for the very first quarter as a result of inadequate demand [in the previous quarter]," stated a Karachi-based source close to PSO.
"Due to reduce need, the power plants had enough inventories built up as well as it's just now that they have started to make use of those stocks," the source stated about product got via a previous tender.
"The business has actually requested providers to prolong the delivery of its October-December product to end-January, yet I assume it will certainly be further extended to end-February," the source claimed, including that the company would currently provide a tender to get 180 CST HSFO in mid-February for March-May delivery.
PSO had acquired through tender 1.275 million of gas oil-- 5 freights of 65,000 mt each of 180 CST fuel oil, 10 cargoes of 65,000 mt each of 125 CST fuel oil as well as 5 cargoes of 60,000 mt each of reduced sulfur gas oil-- for October-December distribution.
"A lot of the product provided right into PSO originates from Fujairah, but it is still possible that 180 CST market is weak as Singapore as well as Fujairah markets are rather closely interlinked," an investor stated.
The cash differential was last lower on July 30 at minus $1.95/ mt Platts information revealed.
website connected the rate decrease to weaker local need for the utility-grade product.
The lower-viscosity fuel oil-- which makes up much less than 2% of total aquatic gas sales in Singapore, the world's biggest bunkering location-- discovers demand from the utility market regionally.
Pakistan State Oil, a major regional customers of 180 CST HSFO for supply to the country's residential energy companies, has avoided buying the lower-viscosity gas oil grade for the very first quarter of 2015.
The state-owned company acquired 325,000 mt of 180 CST HSFO in five 65,000-mt parcels for Q4 2014.
"The firm deferred acquiring [180 CST HSFO] for the very first quarter as a result of inadequate demand [in the previous quarter]," stated a Karachi-based source close to PSO.
"Due to reduce need, the power plants had enough inventories built up as well as it's just now that they have started to make use of those stocks," the source stated about product got via a previous tender.
"The business has actually requested providers to prolong the delivery of its October-December product to end-January, yet I assume it will certainly be further extended to end-February," the source claimed, including that the company would currently provide a tender to get 180 CST HSFO in mid-February for March-May delivery.
PSO had acquired through tender 1.275 million of gas oil-- 5 freights of 65,000 mt each of 180 CST fuel oil, 10 cargoes of 65,000 mt each of 125 CST fuel oil as well as 5 cargoes of 60,000 mt each of reduced sulfur gas oil-- for October-December distribution.
"A lot of the product provided right into PSO originates from Fujairah, but it is still possible that 180 CST market is weak as Singapore as well as Fujairah markets are rather closely interlinked," an investor stated.
