Asia’s refining margins for very low sulphur fuel oil (VLSFO) logged weekly declines as of Friday, while spot premiums steadied.
Singapore’s VLSFO cracks closed stable day-on-day at premiums near $10 per barrel, but posted declines of more than 10% week-on-week, based on LSEG data.
The market has been under pressure due to heavy supply arrivals this quarter, which include higher arbitrage volumes from Brazil as well as plentiful regional blendstocks, said industry sources.
Meanwhile, Vietnam’s Nghi Son this week offered more fuel oil for December via a tender that closes on Dec. 16, a notice on its website showed.
The refiner is looking to sell 10,000 metric tons of fuel oil for loading between Dec. 21 and 23, following a previous tender offering straight-run fuel scheduled for loading from Dec. 16.
In the downstream bunker market, demand has been largely tepid in the week while bunker premiums also softened, according to trade sources.
Singapore’s delivered VLSFO bunker premiums to cargo quotes fell below $10 this week, some sources said, hitting near five-month lows.
INVENTORY DATA
– Fuel oil inventories in the ARA fell 4.2% to 1.29 million tons in the week to Dec. 12, data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Oil prices nudged upwards on Friday, heading for their first weekly rise since the end of November, as additional sanctions on Iran and Russia ratcheted up supply worries, while a surplus outlook weighed on markets.
– Organized crime groups in Ecuador are increasingly stealing fuel from state-run oil company Petroecuador to support drug trafficking operations, resulting in hundreds of millions in lost income for the country’s top industry, the company and officials said.
– French shipping major CMA CGM is seeking marine biofuel for term delivery in Singapore, the world’s largest bunker hub, between January and December 2025, according to market sources.
– Brazil’s state-run oil company Petrobras said it has signed a 16.5 billion real ($2.8 billion) deal to build and charter 12 new support vessels to supply its offshore platforms.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Two trades
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Alexander Smith)