Time spreads of 380cst fuel oil recovered in Asian markets from Thursday's losses to close at a premium of $0.25 on Friday, despite sizable inflows from Western arbitrage cargos that will boost supplies over late January and early February.



Front month time spreads for 380cst have not traded at a premium since mid-June last year. The January and February spreads for 180cst fuel oil also strengthened significantly, settling at a discount of $1, up $1.50 from Thursday's close. "I think it's still a pretty constructive front," said a Singapore-based trader. "The spreads are being bid and the bunker market is strong."



Bids continue to strongly outnumber offers in cash markets as a result of tight prompt supply and no deals were reported. Still, the trader maintained that although not many deals were being done, it was still supportive of the market. "Outside the window, also fairly strong numbers seen on the cargo trades," said the trader. "How long it holds is the question now."



Western arrivals into East Asia for January closed at nearly 6 million tonnes, according to an assessment by Thomson Reuters Oil Research and Forecasts. This is the highest level since June's ill-fated bull trading play and well above the 2015 monthly average of 4.78 million tonnes, due mainly to loading delays that stemmed from weather-related issues in the past one or two months in the Caribbean and the Black Sea, causing arrivals to be bunched up in the second half of the month.