UPDATE 2-Three BP fuel oil traders in U.S., 1 in London quit

* Four resignations from BP’s U.S. and London fuel oil team

* Resignations from global fuel oil desk now total 14
(Adds details on moves and updates market)

By Yaw Yan Chong

SINGAPORE, May 31 (BestGrowthStock) – Resignations from BP Plc’s
fuel oil team extended globally with the departure over the
past month of three traders from its U.S. office, including the
team leader, and the head trader in London, three industry
sources said on Monday.

These take the total number of departures from the unit to
14 worldwide, after Reuters reported that five fuel oil traders
in Singapore and four support staff quit last Wednesday,
following the resignation of global fuel oil head Quek Chin
Thean a week before that. [ID:nSGE64P0MF]

When contacted, a BP spokeswoman in Singapore declined to
comment. The reason for the resignations was not immediately
clear.

The fuel oil traders in the United States and London
resigned over the past three to four weeks, the sources said.

“Most of BP’s fuel oil team, including the global head and
the heads of the three trading centres, have left in the past
month,” a U.S.-based source said.

BP (BP.L: ) has been a major player over the past 15 years in
the fuel oil market. In Asia, it regularly trades
500,000-600,000 tonnes of physical cargoes monthly.

The departures in the U.S. of fuel oil leader, Tim Gawne,
another physical trader and the third who traded derivatives,
left the team with one derivatives trader, the sources said.

Its European fuel oil team head, Chris Paine, left about a
month ago to join European trading house Vitol, but the six
other traders remain on the desk.

Paine, who has been its London-based team leader for about
two years, was BP’s youngest book leader when he was appointed
to the position at the age of 28, sources said.

The void left by the departures of key traders globally,
including Asia team leader Edmund Lau, has removed crucial
support for the fundamentally weak Asian fuel oil market, where
BP had been engaged in a bull trading play for the past two
months for the May and June contracts, traders said.

In the immediate aftermath of the resignations of its Asia
fuel oil team, BP’s marine fuels division in Singapore has not
offered spot ex-wharf bunkers on Wednesday and Thursday. But it
has since resumed offers of bunkers on Monday, traders said.

The fuel oil market remained weak by Monday’s close, with
traders attributing this to the recovery of crude oil prices
after a recent slide and a lack of confidence in the residual
fuel market, which has been saddled with supplies for five
months up till July.

Reflecting the weakness, fuel oil’s June crack spread to
Dubai crude was valued at a discount of $6.70 a barrel by the
close, down 25 cents from a day ago and the lowest since May 6.

The weakness in its timespreads extended further down the
12-month forward curve, with June/July to January/February at a
contango of $3.00 a tonne or weaker for a third session.

Before the resignations, BP bought large volumes of
180-centistoke (cst) grade fuel oil for the June contract for a
two-week period, amid sliding global crude oil benchmarks.

The major picked up at least 30,000-40,000 tonnes daily, in
what traders say is a bull-trading play on the product’s crack
spreads to Dubai crude, and bought as much as 100,000-150,000
tonnes on some days, Reuters data show.

BP has combined storage capacity of about 600,000 cubic
metres in the Universal and Tankstore oil terminals in
Singapore and for the past three years has been the top
supplier of marine fuels in the city state, the world’s top
bunker port by volume, with 400,000-500,000 tonnes a month.

Stock Market Research Tools
(Editing by Ramthan Hussain)

UPDATE 2-Three BP fuel oil traders in U.S., 1 in London quit