Asia’s fuel oil cash premiums were little changed for a second consecutive session on Tuesday, with bids and offers rangebound, while margins remained elevated as crude prices fell.
The spot market has largely quietened this week though a couple of regional tenders were still underway.
Sri Lanka’s Ceypetco offered 30,000 tons of high sulphur fuel oil (HSFO) for loading in June, with the tender closing on May 7. Separately, Vietnam’s Nghi Son offered 10,000 tons of fuel oil for loading in May, in a tender that closes on May 1.
Intermonth spreads for HSFO widened in backwardation, while very low sulphur fuel oil (VLSFO) spreads narrowed in contrast.
Refining margins retained strength as crude prices weakened. Cracks for 380-cst HSFO closed at premiums above $1 a barrel, while VLSFO cracks remained above premiums of $10 a barrel on Tuesday, based on LSEG data.
REFINERY UPDATES
– Venezuela’s state-run oil company PDVSA has restarted the fluid catalytic cracker at the country’s largest refinery, the 645,000-barrel-per-day Amuay, two sources close to operations said on Monday, expanding its capacity to produce motor fuels.
– Spain’s Petronor is gradually restarting its Bilbao oil refinery after shut down caused by a widespread power blackout that affected Spain and Portugal, a spokesperson said on Tuesday.
OTHER NEWS
– Crude oil prices fell on Tuesday as investors lowered their demand growth expectations due to the trade war between the United States and China, the world’s two biggest economies.
– Tankers are lining up near an old oil port at Venezuela’s Western region to load crude cargoes and depart from the South American country before a May 27 deadline set by the U.S. to wind down operations and exports, according to documents and data.
– Kazakhstan increased oil exports by 7% year on year to 19.515 million metric tons (1.63 million barrels per day) in January-March thanks to a supply boost via the Caspian pipeline, Reuters calculations based on official data and sources showed on Tuesday.
– Several former traders from oil major Shell have set up trading house Atmin, backed by Afreximbank, to focus on African oil trading, two trading sources familiar with the development said.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
