Crisis-struck Venezuela is sending two supertankers filled with fuel oil across the oceans to Singapore, in what traders described as a surprise move that could help reduce a tight market.
Shipping data in Thomson Reuters Eikon shows that two fully-laden very large crude carriers, the New Dream chartered by PetroChina and the Trafigura-chartered Britanis, are heading to Singapore with 270,000 tonnes each of fuel oil from the Bonaire Terminal owned by Petroleos de Venezuela.
Venezuelan exports of residual fuel oil have been sporadic into Singapore since the start of the year but the city-state has taken in 997,000 tonnes over the past three weeks from the country, recent government data showed.
The total amount of fuel oil arriving in Singapore from Venezuela between early June and early August is at least 1.5 million tonnes, according to International Enterprise (IE) Singapore and ship-tracking data.
In the week to June 29, net fuel oil imports into Singapore were at a 8-week high of 1.14 million tonnes, of which Venezuela contributed 563,000 tonnes, IE Singapore reported.
Traders said that the strong imports came as a surprise to some and could help ease a tight Singaporean fuel oil market expected in July as a result of fewer arbitrage flows during the past three months.
“That might explain why time spreads got hammered at the end of June and beginning of July,” said one Singapore-based trader.
In the days after the latest official data, 380-cst fuel oil front-month time spreads widened their contango from minus 50 cents a tonne on June 29, to minus $2 a tonne on July 1. Contango is when prices for prompt supplies of a commodity are cheaper than later-dated supplies.
The New Dream is currently in the East Indian Ocean and is due to arrive in Singapore on July 8, while the Britanis is off the East Coast of Brazil and is due to arrive in Singapore on August 1, shipping data showed.
Venezuela is in a deep economic and political crisis. This has affected its oil output, which has fallen about 11 percent since this time last year to around 2.37 million barrels per day.
[Source:- Reuters]
