Asia’s very low sulphur fuel oil (VLSFO) market extended a decline on Friday, while high sulphur fuel oil also eased after a short-lived rally earlier this week.
Regional supplies remained ample, with onshore inventories at key global fuel oil hubs extending gains this week. Singapore inventories were at five-month highs, while Rotterdam stockpiles hit six-month highs, latest data showed.
VLSFO prices retained downward pressure following Kuwait Al Zour’s first spot tender release of the year, with Singapore’s cash premium MFO05-SIN-DIF easing to $3.50 a metric ton by Friday, while front-month cracks dipped below premiums of $11 a barrel.
HSFO also eased at the end of the trading week, though price declines were capped by steady buying from Chinese major Sinopec Fuel Oil.
Singapore’s 380-cst HSFO cash premium FO380-SIN-DIF closed at $7 a ton, while cracks near discounts of about $9 a barrel.
In tenders, Pakistan’s PARCO is offering HSFO for end-January loading, closing on Jan. 11.
ARA INVENTORIES
Inventories at ARA STK-FO-ARA rose to six-month highs, climbing 8.6% week-on-week to 1.396 million tons in the week to Jan. 4, data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Oil rose on Friday after minutes from a Federal Reserve meeting suggested inflation was under control, while U.S. Secretary of State Antony Blinken prepared to visit the Middle East to try and prevent the Israel-Gaza conflict from widening.
– The Caspian Pipeline Consortium exported a record 63.5 million metric tons (1.36 million barrels per day) of oil in 2023 via its marine terminal near the Russian port of Novorossiisk, it said on Thursday.
– Mexican state oil company Pemex’s top executive estimated on Thursday that the firm’s newest refinery will process 243,000 barrels per day of crude in 2024 during its first year of operations, before ramping up to near full capacity in 2025.
– U.S. refiner and petrochemical manufacturer Phillips 66 is in active discussions for a sale of its non-core assets, Chief Executive Mark Lashier said on Thursday.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: Four trades
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh)