Asia’s cargo premium for very low sulphur fuel oil (VLSFO) eased on Tuesday amid a backdrop of ample supplies, even as bunkering demand held firm in the month following Red Sea tensions.
The region remains well-supplied following January’s heavy influx of arrivals, ship-tracking data showed, with onshore inventories at Singapore remaining well above December’s levels.
Trade sources expect East of Suez supplies to remain plentiful in February, though arrivals may slow slightly due to the rerouting of a few Aframax fuel oil vessels owing to Red Sea shipping disruptions.
Singapore’s cargo cash premium for 0.5% VLSFO dipped to $8.55 a metric ton on Tuesday, though refining cracks for February LFO05SGDUBCMc1 held firm at premiums near $16 a barrel, based on LSEG data.
The east-west VLSFO price spread for February remained wide above $50 a metric ton this week.
Meanwhile, high sulphur fuel oil (HSFO) benchmarks continue to be stuck rangebound. Cash premium for the 380-cst grade was pegged at $2.75 a metric ton, while cracks held at discounts of about $12 a barrel.
LNG BUNKER UPDATES
Singapore’s Seatrium said it has delivered liquefied natural gas (LNG) bunkering vessel Brassavola to shipper Indah Singa Maritime, a subsidiary of Mitsui O.S.K Lines.
The is the first LNG bunkering vessel that was constructed in Singapore, and it will be chartered by Pavilion Energy to supply LNG as a bunker fuel.
The vessel is expected to commence operations in February and will also be deployed by supplier TotalEnergies Marine Fuels under a long-term agreement with Pavilion Energy.
OTHER NEWS
– Oil prices bounced back in early trade on Tuesday, following a more than 1% drop in the previous session, as escalating geopolitical tensions in the major producing region the Middle East fuelled supply concerns.
– China’s independent refiners are holding off from buying Iranian crude oil for February as a stand-off over pricing and terms enters a second month, trading sources said.
– Indian state-run oil marketing company Bharat Petroleum Corporation reported a 73% rise in quarterly profit on Monday, helped by strong refining and marketing margins.
– The U.S. on Monday began reinstating sanctions on Venezuela, and a Biden administration source said a roll-back of restrictions on the oil industry could be allowed to expire.
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 Shweta Agarwal)