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Asia Products Outlook-Drifts in mixed sentiment

SINGAPORE: Asian oil product prices are expected to drift this week amid mixed market perceptions and little fresh direction from crude, traders said on Monday.

They said regional gas oil demand was seen little changed while supply looked ample.

"Hong Kong is not buying much. Vietnam and Indonesia are buying, but only at normal and even lower levels (than the same time last year)," said one trader.

The market had since last week been talking about more cargoes flowing out of the Middle East and South Korea, arriving in Singapore in the second half and late April.

"That is why there are so many sellers in the cash market. The supply is ample. More Middle East barrels are definitely coming," said the trader.

Others said that the cash market was not as bearish as it appeared.

"Look at the Singapore stock draw. There is more talk than real fixtures of cargoes moving here," said another trader.

Singapore middle distillate stocks fell 1.089 million barrels to 4.695 million barrels in the week ended March 29, government data showed.

PROMPT FUEL OIL TIGHT

Strong spot buying interest was seen lending support to fuel oil prices in Singapore amid market perception of tight prompt supplies.

"Indonesia, Vietnam, Taiwan and bunker are all supporting factors, and supply from Korea is tight," said one trader.

South Korean high sulphur fuel oil was heard talked at $5.00-$6.00 per barrel premium over Singapore prices fob lifting around mid-April.

But traders said demand from the top importer China had slowed in late March and the pace was likely to linger this week.

Chinese importers have yet to alleviate high stocks accumulated in the buying spree of the first three weeks.

Traders said the current spot price at $175 per tonne could barely yield comfortable margins for Chinese importers who saw a tax-inclusive domestic price of 1,750 yuan ($211) per tonne in south China.

Singapore gasoline prices were seen likely drift over the week in a relatively balanced market, with key support still coming from the US, traders said.-Reuters