Spot premiums for fuel oil dipped in Asia on Friday, with high supply inventories and tepid demand limiting market recovery.
Onshore inventories at Singapore have built to their highest in 18 weeks, supported by strong imports from Iraq, showed Enterprise Singapore data.
Singapore spot premium for 380-cst high sulphur fuel oil (HSFO) inched lower towards $2 a metric ton, while very low sulphur fuel oil (VLSFO) premium fell below $6.
However, margins retained strength due to weaker crude prices. The 380-cst HSFO crack (FO380BRTCKMc1) closed above premiums of $1 a barrel, while VLSFO cracks (LFO05SGBRTCMc1) closed at premiums above $10 a barrel, LSEG data showed.
Meanwhile, Kuwait’s KPC sold a cargo of VLSFO for loading in mid-May via tender this week, shipping records showed.
The cargo, scheduled to load between May 14 and 15, was awarded to a Middle Eastern trading house at a discount of low $10s per ton over Singapore VLSFO benchmark quotes, said industry sources.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) dipped 2.4% at 1.16 million tons in the week to April 24, based on data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices were on track for a weekly loss as a potential OPEC+ output increase and a possible ceasefire in the Russia-Ukraine war may raise supply, while conflicting U.S. tariff signals limit the demand outlook.
– Three more Russian insurers, including a subsidiary of top lender Sberbank, have asked India for approval to provide marine insurance for oil shipments sent to Indian ports, two sources with knowledge of the matter said, as Moscow looks to maintain deliveries despite Western sanctions.
– Valero Energy Corp’s license to import fuel into Mexico was reinstated following a suspension in early April, Chief Operating Officer Gary Simmons told analysts on the U.S. refiner’s first-quarter earnings conference call.
– Aster Chemicals and Energy, the new operator of the Bukom refining complex, is planning to bid for Exxon Mobil’s petrol stations in Singapore, five people with knowledge of the matter said, as the refiner seeks retail fuel sales outlets.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Two trades
– 0.5% VLSFO: Two trades
Source: Reuters
