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Asia product swap: Slips on crude in thin trade

SINGAPORE: Singapore oil product swaps fell in quiet early trading on Monday as the market slid on the back of soft crude and signs of improving regional supplies.

"The market came down with crude but there's also some signs that supplies are improving, especially for fuel oil," a trader said.

Brokers said bids and offers across the barrel, were very wide with most players unwilling to take up aggressive positions ahead of the important OPEC meeting next Monday when a decision on output levels would be made.

April fuel oil was last quoted at $151.50/$153.00 per tonne, down from $155.50/$157.00 on Friday.

Brokers said the April/May fuel oil backwardation narrowed on news of improved regional supplies with fresh barrels seen coming out of Thailand and the Middle East on top of arbitrage cargoes from the Americas.

April/May was last quoted at $7.00/$8.50 with a trade done earlier in the day at $8.50 compared with Friday's $9.50/$11.00, they said.

Weaker fuel oil values also sent the crack spread wider into negative territory after trading up to an impressive plus $1.60 per barrel only eight days ago.

The April fuel oil/Dubai crack was last quoted at minus 80 to minus 60 cents, brokers said.

U.S. crude futures in after-hours ACCESS for April last traded down 36 cents at $30.55 per barrel by 0510 GMT, extending the 18 cents loss chalked up in New York on Friday.

Gas oil also lost ground on the back of crude's loss.

April gas oil was last quoted at $29.35/$29.60 per barrel, but down from Thursday's $30.00/$30.10, brokers said.

April/May gas oil edged down slightly at $1.65/$1.80 compared with a trade done on Friday at $1.85 per barrel.

Traders said there were concerns that strong physical support, which had led to a $5 premium between the cash and paper markets, was unsustainable in the face of falling crude.

"I'm surprised the refiners are not taking advantage of this and selling the physicals," a trader said.

On Friday, local trader Hin Leong bought 150,000 barrels for April 1-5 loading at $35 per barrel. -Reuters