Asia’s spot fuel oil differentials held steadily in discounts on Wednesday, with trade sources eyeing ample supply for both high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO).
Singapore 380-cst HSFO traded at a wider discount of $3.25 a metric ton to cargo quotes. Meanwhile, VLSFO market activity was thin, with bids and offers rangebound from the previous day.
For now, the market is keeping a close watch on Ukraine peace talks, as a deal will reshuffle some Russian HSFO barrels if sanctions are lifted.
As for other regional supplies, India’s BPCL offered 36,000 tons of HSFO for loading from Mumbai between December 13 and 14, trade sources said. The tender closes on Thursday.
Meanwhile, cracks for fuel oil traded in mixed directions amid volatile sentiment. VLSFO crack (LFO05SGBRTCMc1) fell to a premium below $4 a barrel, while 380-cst HSFO crack (FO380BRTCKMc1) edged up to a discount slightly narrower than $8 a barrel, logging a sharp drop day-on-day.
The hi-5 (FO05-380SGMc1), which reflects VLSFO’s premium over the price of 380-cst HSFO, slipped further to about $75 a metric ton, data compiled by LSEG showed.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) rose 9% to 11.17 million barrels (1.76 million tons) in the week to November 24, based on FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– OPEC+ is likely to leave output levels unchanged at its meeting on Sunday while focusing talks on a theoretical topic of how much oil its members can produce so the group can decide future policies, three OPEC+ sources said.
– The Iraqi government has arranged the payment of delayed salaries for local staff at the Lukoil-operated West Qurna-2 oilfield, to ensure production continues despite U.S. sanctions on the Russian company, three Iraqi energy officials said.
– China will receive its first Golden Arrowhead crude cargo from Guyana in December, according to trade sources and shipping data, as producer CNOOC Ltd seeks to expand markets for the new grade.
Source: Reuters
