20000329Asia fuel oil prices up

SINGAPORE: Asian fuel oil prices rose on Tuesday as buyers returned to the market ignoring uncertainties posed by the OPEC meeting in Vienna where producers are expected to decide on a new output policy.

"I think some people decided to just come out and buy even though OPEC has not made up its mind because there are signs that prompt supplies are tight," a trader said.

Traders said most buyers were sidelined on Monday after crude gave mixed signals in the face of OPEC's indecision. But buyers returned on Tuesday convinced that the producers would raise output by an expected 1.5 million barrels per day (bpd).

"I think the market has already discounted 1.5 (million bpd), if that's the case, we might even see prices going up," a trader said.

In the physical market on Tuesday, two 20,000 tonne lots of 180-cst cargoes changed hands as Vitol sold one for April 12-16 to Hin Leong at $164 per tonne, and Shell, the other to Caltex at $162 for April 23-27, traders said.

Bids were at a low $159 on Monday while two cargoes changed hands on Friday at $158 and $160 on Friday.

Traders said there were indications that China, which had purchased bumper volumes for March, was not expected to buy similar volumes for April.

One Chinese trader said purchases into the key Guangdong market alone, which accounts for about 70 percent of all Chinese imports, totalled close to one million tonnes in the first three weeks of this month.

China typically imports about 1.2 million tonnes per month.

Traders said China had already purchased to cover much of its needs for April from South Korean refiners at between $10-11 per tonne premium on a c+f south China basis, and about $4-5 on an fob Korea basis.

The slowdown of Chinese demand, however, was balanced by fresh requirements from Taiwan and India which issued new buy tenders this week.

Taiwan was seeking its regular low sulphur fuel for May delivery while India sought a total of up to 60,000 tonnes for delivery in mid-April.

Traders said supplies from the Middle East were tight due to the scheduled shutdown in stages of the major 485,000 barrel-per-day (bpd) Kuwaiti Mina al-Ahmadi refinery.-Reuters