Asia Gas Oil Traded At One-Year Low

Singapore gas oil was traded at its lowest level in nearly a year but ample supplies are still seeking homes, traders said on Tuesday.

Near market close, two 1,50,000-barrel cargoes of gas oil changed hands at $22.90 and $23.00 a barrel, both for loading between June 25-29.

Both cargoes were purchased by Marubeni International Petroluem Corp (Mipco). The first cargo was sold by British Petroleum and the second by U.S Mobil.

Traders said Mipco could be buying on behalf of a local trader in Singapore. Mipco had also purchased a jet-fuel cargo from a European major at $23.50 for July 6-10 loading.

 

Including Mipco's jet cargo trade, a total of 4,05,000 barrels of jet supplies changed hands. The other two cargoes were bought by a local trader at $22.40 and a major at $22.50 for end June loading.

Some traders were hopeful that the arbitrage cargoes would be absorbed into India preventing the supply glut from worsening.

However, demand from China, Asia's largest gas oil importer, remained poor.

Traders said arbitrage cargoes scheduled to arrive in July is expected to weigh further on gas oil prices. At least three western traders were expected to move gas oil cargoes west to east.

They said in addition to the arbitrage supplies, South Korea is estimated to have more supplies in July compared to June.

South Korea is estimated to have exported at least ten MR cargoes of gas oil in June. But traders said South Korean traders are holding on to their supplies at the moment, unwilling to sell at current low prices.