• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 9 hours Oil prices going Up? NO!
  • 29 mins Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 21 mins Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 2 days Could Venezuela become a net oil importer?
  • 24 hours Oil prices going down
  • 1 day Could oil demand collapse rapidly? Yup, sure could.
  • 37 mins The Tony Seba report
  • 2 days Gazprom Exports to EU Hit Record
  • 2 days Oil Buyers Club
  • 7 mins Kenya Eyes 200+ Oil Wells
  • 5 hours Saudi Arabia turns to solar
  • 17 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 11 hours Are Electric Vehicles Really Better For The Environment?
  • 1 day Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 2 days Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 2 days EU Leaders Set To Prolong Russia Sanctions Again
Oil Markets Will Only Get Tighter

Oil Markets Will Only Get Tighter

OPEC has agreed to increase…

NAFTA Rift Could Be A Boon For Canadian Oil

NAFTA Rift Could Be A Boon For Canadian Oil

President Trump’s plan to renegotiate…

PetroChina Cuts Fuel Oil Floating Storage

Storage

PetroChina and trader Mercuria have sold off half of the fuel oil they had in floating storage off the coasts of Singapore and Malaysia on strong demand, according to traders quoted by Reuters. The size of fuel oil in floating storage in the area has been reduced by half, the sources said, suggesting the two companies resold what they bought between March and May.

Storing fuel oil now is unusual, because the fuel oil market in the three-month period has been in backwardation – when spot market prices are higher than futures prices. In such circumstances, traders are quick to sell their stored fuel rather than keep it.

According to the sources, PetroChina and Mercuria bought a combined 6 million tons of fuel oil in the three-month period and stored them in eight or nine tankers, including Very Large Crude Carriers, which can carry up to 2 million barrels of crude, and Aframaxes, which can carry an average of 750,000 barrels.

Fuel oil remains in strong demand for bunkering, despite the growing popularity of LNG as marine fuel due to lower emissions. Regulators are helping make LNG more attractive: last year, the International Maritime Organization introduced a global 0.5-percent sulfur cap for maritime vessels that will come into effect in 2020.

Marine fuel sales in Singapore fell last month, by 4.2 percent on the year to 4.181 million tons, according to data from the Maritime and Port Authority of the city-state, but even so, fuel oil is trading at a higher cash premium. This may climb up further as the coming months will see lower supply from Middle Eastern producers. They will need more of the fuel for domestic consumption as peak demand for air conditioning kicks in.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News