Spot premiums for high sulphur fuel oil (HSFO) extended gains in Asia on Friday, while very low sulphur fuel oil (VLSFO) held in discounts by the end of the trading week.
Bidding activity was strong for both HSFO physical and derivative markets, according to trade sources.
The backwardation for 380-cst HSFO widened sharply on Friday, with the /April spread hitting $28 a metric ton, compared with about $23 the previous day.
However, weak demand for marine fuel continued to drag bunker premiums lower for both HSFO and VLSFO grades.
Singapore bunker differentials for delivered VLSFO held near year-to-date lows this week, hovering in single-digit premiums to cargo quotes, based on sources.
Refining margins for fuel oil closed lower on Friday, with April /Brent crack (LFO05SGBRTCMc1) sliding to premiums near $7 a barrel, while 380-cst HSFO cracks (FO380BRTCKMc1) closed at discounts of about $2.40 a barrel, based on LSEG data.
In other spot discussions, India’s BPCL offered a HSFO cargo for loading near mid-March, in a tender that closes on Friday. Meanwhile, Pakistan’s PARCO offered 180-cst HSFO for loading in later March, via a tender closing on March 13.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) fell 4.5% to 1.22 million tons in the week to Mar. 6, based on data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices gained on Friday but were set for their biggest weekly decline since October as the uncertainty around U.S. tariff policy is creating concerns about demand growth at the same time major producers are set to increase output.
– Russia’s seaborne fuel oil and vacuum gasoil exports dropped 15% in February from the previous month to around 3.3 million metric tons due to lower production, stormy weather, delayed loadings and drone attacks, trade and shipping data showed.
– All licensed bunker tankers operating in the Singapore port will be allowed to carry and deliver up to 30% blended marine biofuel (B30) from Friday, a circular from the Maritime and Port Authority of Singapore showed.
– President Donald Trump’s administration is considering a plan to stop and inspect Iranian oil tankers at sea under an international accord aimed at countering the spread of weapons of mass destruction, sources familiar with the matter told Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Three trades
– 0.5% VLSFO: No trade
Source: Reuters
