Prompt Gas Oil Trades At New Low

Singapore prompt gas oil traded at new year low of $24.50 per barrel following a weak Western market and the persistent prompt overhang in the region which was not matched by demand, traders said yesterday.

But one trader said the $24.50 deal, involving a 210,000-barrel cargo sold by a European major to a Japanese trader for June 19-23 lifting, was a "not a bad number" compared with the slide seen on IPE gas oil futures. IPE lost $2.00 per tonne to be last traded at $168 for June and $169.50 for July.

The previous low for prompt gas oil in Singapore was $24.80 during end May. Softness was also seen on cargoes in the last week of June and early July which has fallen to $24.80, from $25.30 on Tuesday.

 

Traders said the market initially received buying support from swaps players but lost ground again when physical sellers offered at lower levels.

Traders remained nervous about the open arbitrage from the Mediterranean and the lack of demand from the region. A silver lining is seen from Indonesia but this would not come until July or August as two refineries are scheduled to shut for maintenance.

More support is also seen from Sri Lanka which has issued yet another tender to buy 235,000 barrels barrels of gas oil and 60,000 barrels of jet fuel for June 29-30 delivery.