The price of oil produced from shale reservoirs in China has rebounded Yuan 350/mt ($55.30/mt) or 8.3% since last Wednesday, supported by a pickup in buying interest from fuel oil traders, sources said.
China's sole commercial shale oil refinery, the 400,000 mt/year Fushun refinery in Liaoning province, sold around 12,000 mt of shale oil at Yuan 4,561/mt on an FOB Fushun basis via tender Tuesday, up Yuan 350/mt or 8.3% from its last sale last Wednesday.
It is the first increase in price since March 20, when the shale oil tender price was pegged at Yuan 6,680/mt, Yuan 2,119/mt or 32% higher than Tuesday's price level, data showed.
"The last tender price was too low, so many fuel oil traders who are short of blending material would like to take a bet and buy some this time," a fuel oil trader in Guangdong said. The starting price in Tuesday's tender was Yuan 3,996/mt, lower than the sale price last Wednesday, the trader added.
The trader participated in Tuesday's tender, but was outbid.
Fushun refinery, a subsidiary of state-owned Fushun Mining Group, last sold around 10,000 mt of shale oil, one of the main blending materials for domestically blended 180 CST fuel oil, at Yuan 4,211/mt on an FOB Fushun basis via last Wednesday's tender.
Shale oil can be blended with residual oil in a 30:70 ratio to produce domestically blended 180 CST bunker fuel oil.
"Bunker fuel demand remains low, so it is still early to tell whether the price of domestically blended 180 CST bunker fuel will be pushed up as a result," a fuel oil trader in Shanghai, who offers Yuan 4,800/mt for domestically blended 180 CST bunker fuel, said Tuesday.
Platts assessed domestically blended 180 CST bunker fuel oil Monday at Yuan 4,600-4,650/mt in both South and East China.
