SINGAPORE: Kuwait Petroleum Corp (KPC) sold 80,000 tons of end-May loading cracked fuel oil into Singapore at lower price levels, at a time of heavy supply in the market, traders said on Wednesday. The 380-centistoke (cst) parcel, for lifting on May 26-27 from Shuaiba, was sold to Glencore at a premium of $5.00-$6.00 a ton to Middle East spot quotes on a free-on-board (FOB) basis, down from a $15.00-premium previously. "It's a bit of a surprise that the cargo is coming here to Singapore and that means the Middle East guys are full and are not interested," a Singapore-based Middle East trader said. "The market seems to be in a bit of a flux — on the one hand, there are less arbitrage cargoes coming in for May, but on the other, tenders for high-viscosity cargoes are still being done at weak numbers." Reflecting the still-weak Singapore market, its prompt May/June time spreads were valued at a contango of $3.50 a ton by midday, down from a recent peak of minus $2.00 less than a week ago. Its front-month crack spreads were also relatively weak at a discount of $7.76 a barrel to Dubai crude, down from minus $6.46 just two weeks ago. However, Western arbitrage barrels for May are at 2.5-2.6 million ton while a similar volume has been booked for June, down from April's six-month high volumes of 3.7-3.8 million tons. "The market seems confused, especially after yesterday, when the time spreads weakened big-time. There's certainly less oil coming in for May and the cargoes are more balanced between cutters and high-viscosity barrels," another trader said. "But the million-dollar question is how much of the overhang supplies that landed in April are going to be a factor going forward. It would seem that the market is quite divided on that."
