The spot cash premium for very low sulphur fuel oil (VLSFO) in Asia climbed for a seventh consecutive session on Wednesday, while Kuwait’s Al Zour awarded its latest tenders for April.
The refiner sold a 120,000-tonne cargo for April 3-4 loading at a discount of $15 to $17 a tonne to Singapore quotes, and another 120,000-tonne cargo for April 7-8 loading at a discount of $10 to $11 a tonne, according to trade sources.
Both cargoes could have been sold to a Western oil major, though this could not be confirmed.
Reflecting steady buying interest, Singapore’s spot 0.5% VLSFO cash premium (MFO05-SIN-DIF) rose to $11 a tonne, while two spot trades emerged on Wednesday.
Elsewhere, Taiwan’s CPC was also seeking low-sulphur fuel oil for May delivery. The tender closes on March 23 and remains valid until March 25.
Meanwhile, the 380-cst high sulphur fuel oil premium (FO380-SIN-DIF) also firmed in recent trading sessions, even as high-sulphur Russian fuel oil barrels continued to flood the East of Suez region.
“Fundamentally, the high-sulphur market remains firm with tight spot volumes despite the heavy Russian arrivals, as much of the arrivals to Asia are not slated to feed into the marine fuels market but to satiate the Chinese feedstock market,” said Emril Jamil, Refinitiv’s senior analyst for crude and fuel oil.
“We believe the emerging trend to China will persist, given the deeply discounted economics of the trade,” he added.
FUJAIRAH INVENTORIES
Residual fuel oil stocks at Fujairah climbed by 12% to 11.41 million barrels (1.80 million tonnes) in the week ended March 20, showed Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices slipped on Wednesday, as an industry report showed U.S. crude inventories rose unexpectedly last week in a sign demand may be weakening.
– Russian Deputy Prime Minister Alexander Novak said that Russia will continue a 500,000 barrels per day oil production cut until the end of June.
– The recent rout in bank shares will not have a knock-on effect on commodities, global trading firm Trafigura’s chief financial officer Christophe Salmon told the Financial Times Commodities Global Summit on Wednesday.
– In the oldest refining town in the American West, Phillips 66 is promising a greener future as it moves to halt crude-oil processing and build a massive renewable diesel plant, leading a global trend.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Two trades
Source: Reuters