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| Singapore prompt 92 RON gasoline swaps curve sinks to deepest contango in nearly 5 years |
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| News Source：http://www.jinchemical.com/
; SendDate：2015-1-7 14:51:18 |
The prompt inter-month time spread for FOB Singapore 92 RON gasoline swaps narrowed almost to a five-year low late Monday, January 5, due to weak demand, traders said Tuesday. The February/March spread was assessed at a contango of 80 cents/barrel Monday, widening from 65 cents/b at Friday's close.
The prompt inter-month time spread was last assessed lower February 24, 2010, at minus 85 cents/b.
A deep contango indicates surplus barrels and weaker demand for prompt cargoes versus the later month.
This weakness was also reflected in the physical cash differential, which inched 3 cents/b lower from Friday's close to a discount of 38 cents/b to Mean of Platts Singapore 92 RON gasoline assessments.
The 92 RON cash differential was also at a multi-year low.
It was last lower on September 18, 2013, at a discount of 65 cents/b to MOPS 92 RON gasoline assessments.
Cash differentials represent the price buyers are willing to pay for a gasoline cargo, expressed as a premium or discount to Platts' benchmark assessments published around the day it loads.
SOFTER DEMAND FROM INDONESIA
Trade sources said the weakness in the market stems from softer Indonesian gasoline demand.
Indonesia is expected to import up to 9.1 million barrels of gasoline in January, down from the 10.3 million barrels in December, a source with knowledge of the country's import patterns said.
Close to 40% of Singapore's gasoline exports flow to Indonesia, and slower demand from Indonesia in January could see supplies in the city state grow.
The country's state-owned oil and gas company Pertamina is expected to import up to 8 million barrels of 88 RON gasoline, and 1.1 million barrels of finished grade 92 RON and High Octane Mogas Component 92 RON gasoline. Adding to the slower demand, Vietnam's state-owned Petrolimex -- the country's largest fuel importer -- has skipped its gasoline term tender for two quarters in a row, in Q1 2015 and Q4 2014, amid slower consumption and sufficient domestic supply, an industry source said.
WIDE EAST-WEST SPREAD KEEPS CARGOES IN ASIA
A wide, prompt East-to-West spread for FOB Singapore 92 RON paper versus Northwest European Eurobob paper has also kept barrels stuck in the region, traders said.
The January East/West spread was pegged at $2.30/b at Monday's Asian close. The spread was, however, higher at $2.80/b late last week.
The current East-to-West value is likely to encourage increased gasoline flow from Europe and the Mediterranean to regions such as the Middle East, while prompting traders to move Indian gasoline barrels to Singapore, traders said.
"Indian cargoes are moving towards Singapore," a Singapore based trader said. "The Middle East is being well supplied from the Mediterranean and so even the Indian-Arabian Gulf flow is not working with East/West where it is." |
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