Fuel oil traders in Asia are paying the lowest premium in six months for the earliest deliveries as sliding freight rates boost supplies from the West.
China’s crude imports are forecast to increase at the fastest pace in four years as oil demand in the world’s second-largest economy accelerates and additional storage tanks are filled.
Arctic weather in the U.S. East Coast is spurring heating oil shipments from Europe, reversing the typical flow of cargoes.
Oil refiners in Europe will shut 10 percent of their plants this decade as fuel demand falls to a 19-year low.
Russian crude’s unprecedented premium to North Sea Brent is vanishing as European refiners switch to higher-value blends and scale back purchases to protect their profits.
Asian petrochemical companies may import little or no naphtha from Europe for a second month in August amid ample supplies and weak demand in Japan.
China, the biggest buyer of Iranian crude, cut purchases to the lowest level in five months in January even as its total oil imports rose after trading companies in the two nations failed to renew supply contracts.
The premium of low-sulfur fuel oil over its higher sulfur equivalent is at its highest level in 11 months because of limited supplies in northwest Europe, according to JBC Energy GmbH.
South Korean tax-free purchases of North Sea Forties crude are poised to stem the slide in prices as the supply of Western Europe’s most abundant oil jumps to the highest level in almost a year.
Naphtha exports to Asia may drop 40 percent this month as refiners boost supply and prices in Singapore discourage shipments from Europe.
"The fuel oil market in Asia will be under pressure until the end of March from elevated inflows from the West."
- David Wech on Mar 16, 2014