Saudi Aramco sells March oil at 6-month high

Hundred thousand barrels per day is the capacity of Samref refinery in Yanbu, Saudi Arabia. The refinery exports five 80,000-tonne cargoes in two months. (AP)

Saudi Aramco has sold 90,000 tonnes of fuel oil for March loading at six-month high price levels into the Fujairah marine fuels market, the second parcel in less than a week to be concluded at such levels, traders said.

The A961 lot of 180-centistoke (cst), for lifting on March 8-10 from Ras Tanura, was sold to Middle East trader FAL Oil at a premium of $4.00-$5.00 a tonne to Singapore spot quotes on a free-on-board basis, up from a discount of 50 cents to a premium of 50 cents previously.

"It's quite a high price, compared to the previous cargo and it's the second one to be done at very much higher levels this week," a Singapore-based Middle East trader said.

"Interests from Middle East players were very strong during the bid process while Singapore traders showed scant interest with low numbers in their bids."

Aramco last sold a similar parcel, for February 27-March 1 loading, to Brazil's Petrobras at between a 50-cent a tonne discount to a 50-cent premium to Singapore spot quotes, FOB.

A day earlier, India's Bharat Petroleum Corporation sold 30,000 tonnes of 380-cst, for lifting on February 28-March 4 from Mumbai, to Vitol at a discount of $7.00-$8.00 a tonne to Singapore spot quotes, FOB, up from minus $10.00-$12.00 previously.

Traders said the Fujairah market was getting tight over the past week, with bunker prices for the 380-cst grade in the UAE port higher than Singapore by $5.00-$6.00 a tonne.

"At the tender strike levels and given where bunker prices are in Fujairah, it still makes economic sense," another trader said.

"At this rate, it would seem that the tightness in Fujairah could worsen, especially with the Yanbu refinery going for maintenance next month. We could see some of the heavy Western flows coming into Singapore being diverted there."

The 400,000 barrels-per-day Samref refinery in Yanbu, which exports about five 80,000-tonne cargoes in two months, will undergo a 45-day turnaround from mid-March.

In contrast to the Middle East region, East Asian nations are heavily supplied next month, with five-month high volumes of Western arbitrage cargoes totalling 3.8-3.9 million tonnes fixed for March.

 

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