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Fri 17 Jul 2009, 07:42 GMT

FAL buys 90,000-tonne fuel oil cargo


Sharjah firm secures cargo amid tight supply forecast and refinery run cuts.

Oil major ExxonMobil is reported to have sold a 90,000-tonne cargo of fuel oil to FAL Oil as strong demand for power generation prevails in the Gulf amid a period of peak air conditioning use across the region. Refinery production cuts have also reduced suplies.

The 90,000-tonne lot is scheduled for loading from Yanbu on July 29-31, Reuters reports.

FAL is understood to have paid a discount of approximately $8 to $9 per tonne to Singapore spot quotes, on a free-on-board (FOB) basis. Earlier this month, the Sharjah-based cargo trader and bunker supplier had paid a higher discount of $13 per tonne to Singapore spot quotes, FOB, for a fuel oil cargo loading on July 15-17.

Strong demand for fuel oil in the Middle East combined with high buying interest from the Asian marine fuel sector has led to growing market sentiment that supplies could remain tight for the next few months. OPEC supply cuts have also had an effect on the supply of crudes with high fuel oil yields.

Furthermore, onshore fuel oil stocks in Singapore fell to a 7-month low in the week ending July 15. Inventory levels plummeted 4.367 million barrels to 14.069 million barrels.

Meanwhile, Saudi Arabian refiner Saudi Aramco is reported to have offered a 90,000-tonne cargo of 180-cst fuel oil for lifting on August 4.

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