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Saudi Aramco sells May Jubail lot to Vitol.

Saudi Aramco, the world's top oil exporter, has sold 90,000 tons of cracked 380-centistoke (cst) fuel oil from Jubail for lifting on May 12 to Vitol at discounts similar to previous deals,traders said. Vitol paid a discount of around $7 per ton to Singapore spot quotes, on a freeon- board (FOB) basis, for the cargo via private negotiations.

This is similar to a discount of $7 to $8 a ton that France's Total paid for a 40,000-ton parcel, loading on April 28-30, also from Jubail. Total had previously purchased two 80,000-ton 380-cst lots from Saudi Aramco for April 5-7 and March 20-24 lifting, also at around a discount of $8.00 per ton, FOB.

The Asian fuel oil market has strengthened over the last two weeks.

The time spreads have flipped into backward position as sentiment firmed on the prospect of tighter supplies ahead.

Fewer arbitrage barrels are expected to land in Asia in May -- falling about 18- 20 per cent from April -- as European refiners slash capacity on poor margins.

Middle Eastern supplies are also shrinking in line with the peak summer demand season, soaking up fuel oil for domestic power generation.

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Publication:Saudi Economic Survey
Article Type:Brief article
Date:May 10, 2009
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