Asia’s spot market differentials for fuel oil inched higher on Friday, posting narrower discounts compared to the previous day, while market structure recovered after recent weakness.
A trade emerged for 380-cst high sulphur fuel oil (HSFO), lifting the cash differential to a discount of $1.35 a metric ton. Meanwhile, bids for very low sulphur fuel oil (VLSFO) also firmed day-on-day.
The recent volatility around oil sanctions boosted sentiment slightly, as some trade sources expect Russian fuel oil movements and workarounds to slow.
Intermonth spreads for both HSFO and VLSFO firmed between the prompt months, logging a narrower contango structure.
Meanwhile, cracks traded in mixed directions. Singapore’s 380-cst HSFO crack rose to a discount of $3.30 a barrel, while VLSFO’s crack held at a premium above $5 a barrel, data compiled by LSEG showed.
INVENTORY DATA
– ARA fuel oil inventories fell 4.6% to 0.92 million tons in the week to October 23, based on data from Dutch consultancy Insights Global.
– Oil prices were little changed on Friday, stabilising after the previous day’s surge and remaining on track for a weekly gain as fresh U.S. sanctions on Russia’s two biggest oil companies over the war in Ukraine fuelled supply concerns.
– U.S. sanctions on Russian-owned NIS have prevented the Serbian oil group from receiving a crude cargo that could have bought time for Serbia’s sole refinery, which faces closure without new supplies, sources with knowledge of the matter said.
– Chandra Asri Pacific said on Friday it will acquire Exxon Mobil’s network of Esso-branded retail petrol stations in Singapore as the U.S. major streamlines its downstream operations.
– ConocoPhillips is laying off employees at its Canadian operations, according to three sources and a company memo reviewed by Reuters, as it moves to cut up to a quarter of its global workforce by next year.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters
