Asia’s spot differential for high sulphur fuel oil (HSFO) slumped into discounts on Friday, despite recent strength in refining cracks.
The market in Asia remains amply supplied, with plentiful cargo availability from the Middle East and Russia, trade sources said.
Singapore cash differential for 380-cst HSFO traded into discounts on Friday for loading dates in the second half of May, after recovering into short-lived premiums for just over a week.
Intermonth spreads also weakened sharply, trading into contango for both 180-cst and 380-cst HSFO grades for the prompt /June contract.
However, HSFO cracks retained strength for the prompt June contract after hitting their highest value in more than six years during the previous session.
As for very low sulphur fuel oil (VLSFO), cash differentials have been extending recovery in recent days, with the product trading higher in the spot market, while prompt cracks (LFO05SGBRTCMc1) remained above premiums of $10 a barrel.
INVENTORY DATA
– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 22.47 million barrels (about 3.54 million metric tons) in the week to May 1, down 6.8% week-on-week but still holding above typical averages, based on Enterprise Singapore data.
– Fujairah heavy fuel inventories (FUJHD04) rose 1.1% to 10.74 million barrels (1.69 million tons) in the week to April 28, showed FOIZ data published by S&P Global Commodity Insights.
– ARA fuel oil inventories (STK-FO-ARA) climbed 3.8% to 1.21 million tons in the week to May 1, according to data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices fell on Friday as traders squared positions ahead of an OPEC+ meeting and amid some scepticism about a potential de-escalation of the trade dispute between China and the United States.
– A vessel chartered by Chevron carrying some 300,000 barrels of Venezuelan oil was set to start discharging at a Venezuelan port on Thursday, according to shipping data and a source.
– Mexican state energy company Pemex’s new Olmeca refinery in March posted its highest crude processing and fuel production figures since it began reporting data in mid-2024, boosting the company’s refining arm even as its hydrocarbon output declines.
– QatarEnergy is in talks with Japanese firms for a long-term deal to supply LNG from its North Field expansion project, five trading and industry sources told Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: One trade
Source: Reuters
