Gasoil FOB Singapore Cargo: Jan. 2 - Mar. 19, 2013
Singapore gasoil cash premiums fall from previous close
The Singapore gasoil cash premiums fell March 19 from the previous close on bearish forward sentiment.
In Singapore, the cash differential for the benchmark 500 ppm sulfur gasoil grade to MOPS Gasoil assessments fell 5 cents/barrel from March 18 to 9 cents/b March 19, on the back of a weaker April/May swap structure, that fell 10 cents/b from March 18’s close to plus 18 cents/b.
Commentary continue below...
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The benchmark 500 ppm sulfur gasoil was assessed at $123.12/b March 19, up 3 cents/b from the previous close. “It has been the same story this past month,” one Singapore-based trader quipped.
The Singapore gasoil 500 ppm sulfur cash premiums to MOPS have been trading within a band of 14-24 cents/b to benchmark Mean of Platts Singapore Gasoil assessments over the past month, with little or no clear market direction, as both physical buyers and sellers were staying on the sidelines for the most part of this month.
Premiums for physical gasoil represent the differential buyers are willing to pay for the oil over and above benchmark values published around the day the cargo loads.
“The market’s been pretty boring really ... trading is around 10-20 cents/b [premiums] for the last few weeks. I don’t see much that’s really changed,” another Singapore-based trader said.
“Demand and supply are both low at present, [which] means there is not a lot of cargoes to speak about,” the trader added.
Part of the limited gasoil supply in the region was also due to the ongoing planned refinery turnarounds in Asia in the coming months.
But while the Asian gasoil market continued to appear monotonous, Asia gasoil values are still marginally higher compared with those in Western Europe, keeping the arbitrage from Asia to Europe firmly shut.
The front-month April Exchange of Futures for Swaps -- the spread between Singapore 0.05% sulfur gasoil swaps and ICE 0.1% sulfur gasoil futures -- fell by $1.76/mt from March 18’s close to plus $1.35/mt March 19.
Arbitrage economics to send gasoil cargoes from Asia to Europe have remained stubbornly limited since early February. This has also had a knock-down effect of pressuring cash premiums in the Persian Gulf lower.
The benchmark Persian Gulf cash market for 500 ppm sulfur gasoil was assessed at Mean of Platts Arab Gulf Gasoil assessments plus $1.60/b March 19, down 10 cents/b from March 18’s close, after an offer during the Platts Market on Close process.
During the Platts MOC assessment process March 19, Shell offered 180,000 barrels of 500 ppm sulfur gasoil for loading over April 5-9 from the Persian Gulf at a premium of $1.50/b to the Mean of Platts Arab Gulf Gasoil assessment.
The offer did not attract any buyers by the end of the market close. In spot market activity, Bahrain Petroleum Company, or Bapco is offering 40,000 mt of 500 ppm sulfur gasoil for loading over April 23-26 from Sitra. The tender closes on March 19, with same day validity.
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