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Mideast fuel oil prices up on demand
Published in Daily News Egypt on 10 - 07 - 2009

SINGAPORE: Middle East fuel oil prices rose $1.75 a ton this week amid peak summer demand while cuts in refinery operation rates globally limit fuel oil production.
Regional fuel oil prices were pegged at about $6.50 a ton, versus about $4.75 a ton a week ago.
You have run cuts... strong demand in Asia from the bunker market, and in the Middle East we are into the peak summer demand season, an Asian based trader said.
We are tight everywhere, that is why you are seeing trades getting done at very strong levels.
On Friday Asian close, Asian trader Kuo Oil paid a $6 a ton premium for a 380-centistoke August loading cargo from European trader Vitol. Kuo also paid a $3 premium for an early August loading cargo of 180-cst in over the counter trade.
The backwardation for July/August was pegged at $3.75 a ton, up 25 cents from the previous session, while August/September was valued at $3 a ton, up 37 cents from day ago levels.
The market is getting tight, you see that in the time series, there is genuine concern about how current demand is going to cope with actual, available supply in the market, a trader said.
I don t think this is very clear yet, but we see it getting tighter for sure.
Global refinery runs for the third-quarter have been revised down by 500,000 barrels per day (bpd) to 72.3 million bpd, due to a deterioration in refining margins, the International Energy Agency (IEA) said this week. The revised level is 1.7 million barrels lower than the third-quarter of 2008.
Gasoline
Middle East gasoline prices remained at steady to last week s levels at around $4.50 a barrel, as regional demand from Saudi Arabia and Iran softens.
Saudi Arabia has cut gasoline imports by about 40 percent this month as new domestic production capacity comes online.
The world s top oil exporter is expected to import around 34,100 barrels per day (bpd) of the motor fuel in July, because of the start-up of a gasoline production unit at Rabigh Refining and Petrochemical Co.
Saudi Arabia typically imports between 60,000 to 70,000 bpd of gasoline.
Gasoline demand is softening up fast, some weeks back there was some optimism that the market was on the way back up, especially with the rally in stock markets, an Asia-based trader said.
US gasoline inventories added 1.9 million barrels to 213.1 million barrels in the week preceding the July 4 Independence Day holiday weekend, when summer travel traditionally peaks.
This rise topped analysts estimates for a 600,000 barrel build.
Kuwait Petroleum Corp (KPC) sold at least 150,000 tons of spot naphtha for August lifting, three times the amount sought in its tender, as the start up of its new aromatics plant continued to delayed, traders said on Friday.
KPC sold the cargoes at premiums of around $20.00 a ton, free-on-board (FOB) basis, more than premiums for May and July cargoes, reflecting tight supplies in Asia.
Gas oil
Middle East gas oil prices were steady as global benchmarks continued to slip on swelling inventories and weak demand.
Regional prices were pegged at $1.40 broadly unchanged to levels from a week ago.
Global oil inventories had increased in May, particularly in North America, Europe and the Pacific, taking stocks to the equivalent of 62.5 days of forward cover at the end of May, 7.2 days more than a year ago and up from 62 days at the end of April. -Reuters


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