Asia’s high sulphur fuel oil (HSFO) market stabilised on Thursday following recent selloffs, with cracks steadying after hitting more than a year’s low earlier this week, though high regional inventories weighed on the overall market.
The crack for December 380-cst HSFO closed at a discount slightly narrower than $8 a barrel, rebounding day-on-day, showed data compiled by LSEG.
Contango for the market narrowed between the prompt months for both 180-cst and 380-cst HSFO, with the latter’s differentials trading higher into narrower discounts for the spot market.
Meanwhile, very low sulphur fuel oil (VLSFO) was under slight pressure, with the product crack (LFO05SGBRTCMc1) sliding to a premium of around $5.55 a barrel, the lowest in more than three weeks.
Nigeria’s Dangote offered low-sulphur straight run fuel for loading in early December, via a tender closing on Thursday.
Both HSFO and VLSFO cracks have been selling off in recent sessions due to a backdrop of slow demand and high inventories.
Onshore inventories continued to hover above average levels this week. Total imports into the tanks rose 47% week-on-week to more than 888,000 tons, with most inflows hailing from the Netherlands, Saudi Arabia and Indonesia.
CHINA DATA
– China’s October exports of fuel oil, mostly for low-sulphur marine fuel bunkering, fell to their lowest monthly volume this year, customs data showed on Thursday. October fuel oil imports into China fell 7% from a month earlier after hitting a year-to-date high in September.
INVENTORY DATA
– Singapore residual fuel inventories (STKRS-SIN) eased 5.5% to 24.52 million barrels (about 3.86 million metric tons) in the week to November 19, Enterprise Singapore data showed.
OTHER NEWS
– Oil prices edged up on Thursday as a bigger-than-expected draw in U.S. crude stockpiles offset speculation that a U.S. push to end the Russia-Ukraine war may add barrels to an amply supplied market.
– China’s crude oil imports remained strong in October, with shipments from Russia at their highest level of the year, and barrels from the United Arab Emirates and Kuwait hitting records, Chinese customs data showed on Thursday.
– A fire erupted at an oil project in Venezuela’s eastern region where the crude upgrader Petrocedeno operates, according to local media and sources from state company PDVSA.
– Oil giant Saudi Aramco said it had signed 17 preliminary deals with U.S. companies with a potential overall value of more than $30 billion, during a visit to Washington by the Saudi Crown Prince.
WINDOW TRADES
– 180-cst HSFO: One trade
– 380-cst HSFO: Four trades
– 0.5% VLSFO: One trade
Source: Reuters
