Crack spreads for very low sulphur fuel oil (VLSFO) weakened on Wednesday as higher selling activity emerged, market sources said, while cash differentials also remained capped.
The product’s front-month crack closed lower at a premium of about $11.60 a barrel at 0830 GMT.
Supply arrivals to Asia breached 6 million tons for April, dipping from March but still higher than a typical monthly average of 5 million tons, calculations based on LSEG’s ship-tracking data showed.
Meanwhile, demand for marine fuel was lukewarm in recent sessions and this capped recovery in delivered bunker premiums, according to market sources.
INVENTORY DATA
Fujairah heavy fuel inventories climbed 1% to 10.77 million barrels (1.70 million tons) in the week to April 22, hitting a four-month high, FOIZ data published by S&P Global Commodity Insights showed.
OTHER NEWS
– Oil prices extended gains on Wednesday after industry data showed a surprise drop in U.S. crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East.
– The Russian economy ministry has downgraded its forecasts for the country’s crude oil export prices for the next three years to $65 per barrel, according to an updated outlook seen by Reuters on Tuesday.
– South Korean petrochemical company LG Chem denied on Wednesday a media report saying it is considering merging its naphtha cracker business with rival Lotte Chemical.
– Ithaca Energy has agreed to buy nearly all of Eni’s UK-based oil and gas-producing assets for about 754 million pounds ($938.28 million) in stock as it looks to become one of the biggest independent energy companies in the North Sea.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Sohini Goswami)
