Winson Oil’s Massive Buys Push Up Singapore Gasoil Margins

SINGAPORE – Hong Kong-based trader Winson Oil buys up a large volume of gasoil in Asia’s oil trading hub in Singapore, pushing up margins for the industrial and transport fuel to a close one-year high.

According to Reuters’s daily trade data, Winson Oil has purchased over 2.3 million barrels of 500 ppm sulfur gasoil for loading from Singapore or southern Malaysia in October during the Platts Market-on-Close assessment process.

The data further shows that Winson Oil has also bought 6.3 million barrels for loading in November along with 300,000 barrels in December of 2016, accounting for roughly 40% of overall gasoil trades during the time period.

Since its large purchase, margins for gasoil in Singapore have risen 20%, reaching prices of $12.69 on Tuesday on the 15th of November

Although Winson Oil was unavailable for comment on the matter, a company executive explains that the cargoes are to be solely used for trade purposes. The source who chooses to retain anonymity declined further comment as he is unauthorized to speak to the media.

According to five traders, it is speculated that Winson Oil intends to use the cargo to fulfill North Asian demand for bunker, or shipping fuel. The fuel, Marine Gasoil (MGO), is utilized by large vessels such as container ships and tankers. It is used to lower emissions while said vessels are near ports.

One trader reveals that Winson Oil has a term agreement with Taiwan and South Korea to lift approximately 4 million barrels of gasoil per month. In addition, a second trader said that the trader also supplies gasoil to the Philippines, Vietnam, Indonesia, and Hong Kong.

The company has been upping trading in Singapore, routinely buying gasoil from Taiwan in order to sell it as bunker fuel into North Asia.

Earlier this year in July, Winson Oil purchased its first very large crude carrier (VLCC) to store gasoil offshore to support its plans to expand into the European and African markets.

One trader commented that “fulfilling the VLCC is the actual demand”.

According to another North Asian Trader, China’s bunker market demand has risen amid increased coal imports and container exports

The trader further notes that the price difference between China’s MGO market which is at $550 a tonne and Singapore’s $420 might be the reason barrels are being drawn there. “This is a big price gap so it could be why they are buying as much gasoil as possible,” the trader added.

According to the traders, Winson Oil is the biggest supplier to the North Asian bunker market which imports roughly 200,000 tonnes, or about 1.5 million barrels, of gasoil monthly.

Winson Group

Since its establishment in 1998, Winson Group has grown to become one of Asia’s largest international energy trading corporations, best recognized for its oil trading and bunkering operations throughout Asia. The group now has offices and projects in Hong Kong, Singapore, Taiwan, Mainland China, Dubai, and other Asian countries, so it can provide a wide range of services to customers.

The group has developed strong and reliable ties with Asia’s major refineries. The group maintains extensive business relationships in Singapore, Indonesia, the Philippines, South Korea, China, Vietnam, and Timor-Leste, among other countries. By capitalizing on its strong market position and in-depth awareness of customer needs, the group has established three distinct lines of business: international oil trading, global marine bunkering, and oil storage and terminal facilities.

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