The Asian fuel oil market is on a roll, buoyed by cold weather in North Asia, continued demand from China's indepen- dent refiners for straight-run fuel oil, and lower supply. Months of light arbitrage volumes from the West have combined with increased buying from South Korea and China to create short- ages of the low-density fuel oil required to blend into the bunker- grade fuel oil known as RMG380. “Finished RMG380 is very tight and the market is jammed up with high-density oil,” a Singapore-based fu- el oil trader said. The tightness has pushed the fuel oil pricing curve into backwardation, with prompt barrels priced at a premium to later barrels. Spot barrels of Singapore benchmark 180 centistoke (180 cst) fuel oil are reportedly trading at $11.50 above March - a two-year high for a front-month spread. The forward curve is in backwardation until September 2011.
展开▼
