SINGAPORE, SEPT 30: The Singapore fuel oil swaps drifted lower at midday on Wednesday, reversing the gains chalked up on Tuesday, traders said."Fuel oil came off this morning. I think most players doubted the market can hold on to the gains too long," said one trader, adding that fears of imminent arrivals of long-haul cargoes from the Mediterranean and even Europe to the region was weighing sentiment down.
October fuel oil paper was quoted at $86.25/$87.50 per tonne, down from Tuesday's $87.00/$87.50.
November was quoted at $82.75/$83.50, compared with Tuesday's $83.25/$83.75.
There was also expectations that the cash market may now come under renewed sell pressure.
On Tuesday in the physical market, 180-centistoke was traded at $88.00 per tonne for October 25-29 lifting between Singapore traders, a level at least $12.00 higher than the last deal done a week ago.
October gas oil softened from Tuesday's levels where prices were quoted at $15.90/$16.00 per barrel, compared with the previous day'slevels at $16.00/$16.10.
Traders said with South Korean refiners increasing runs and as supply tightness in the Middle East eases from November, the market could potentially come under renewed downward pressure.
Despite the supply worries, consistent buying in the physical gas oil market on Tuesday helped buoy prices, traders said.
Two cargoes of 150,000 barrels each were traded at $15.90 and $15.85 per barrel respectively, though levels were lower than Monday's trades at $15.90 and $16.00.
Regrade swaps - or the spread between jet fuel and gas oil- were steady at $2.75/$2.85 for November, brokers said.
Naphtha, in contrast to the other products in the barrel, edged up on the back of higher overnight crude.
October naphtha was quoted 10 cents higher from Tuesday at $15.60/$15.70, brokers said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.