Cash premium for very low sulphur fuel oil (VLSFO) in Asia climbed for a third consecutive session on Wednesday, while high sulphur fuel oil (HSFO) was little changed.
The VLSFO cash premium MFO05-SIN-DIF rose to $4.25 a metric ton, while cracks, firmed to premiums of $11 to $12 a barrel.
“There is likely further upside as the market has yet to fully price in the expected elevated tonnage arrivals and higher fuel requirements amid vessel diversions from the Red Sea,” said Emril Jamil, senior analyst at LSEG Oil Research.
Trade sources said bunker fuel premiums in Singapore have also edged slightly higher than last week, though a wide range of premiums persisted depending on loading dates
Meanwhile, the HSFO market was little changed, with 380-cst cash premium FO380-SIN-DIF pegged at $3.50 a ton, though 180-cst premium FO180-SIN-DIF slipped amid lower offers for February loading dates.
BUNKER UPDATES
Sales of marine fuel at Fujairah dropped by 7.1% in 2023, data showed, though the port retained its position as the world’s third-largest bunker hub.
The decline coincided with increased risk linked to war in the Middle East that has raised war insurance premiums, while competitive pricing lured some bunker demand to neighbouring port Khor Fakkan, which saw a rise in volumes last year.
Fujairah bunker sales, excluding lubricants, totalled about 7.4 million tons in 2023, Fujairah Oil Industry Zone data showed.
INVENTORIES
Fujairah fuel oil inventories rose 9.1% to 9.39 million barrels (1.48 million tons) in the week to Jan. 15, FOIZ data published by S&P Global Commodity Insights showed.
OTHER NEWS
– Oil fell more than $1 on Wednesday as economic growth in China, the world’s second-largest crude user, slightly missed expectations, raising concerns about future demand, while U.S. dollar strength dented investor’s risk appetite.
– Supply cuts by OPEC+, costly shipments from some traditional Middle East suppliers, and geopolitical tension are driving India, the world’s third-biggest oil importer, to diversify its crude sources and accelerate its energy transition, Indian Oil Minister Hardeep Singh Puri said.
– Thailand has ordered traders to suspend diesel exports while Thai Oil Plc repairs its No. 3 crude distillation unit (UDC) in Chonburi province, a government official said on Wednesday.
– Marine biofuel demand at the world’s largest bunker hub Singapore could potentially double by 2025 to almost 1 million metric tons from 2023 levels as shippers seek to cut emissions, a senior TotalEnergies executive said.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Tasim Zahid)