Asia’s very-low sulphur fuel oil (VLSFO) market strengthened on Thursday, despite a term tender issued recently by Kuwait’s Al Zour refinery supplies.
The refinery had issued a term tender for VLSFO for July to December loading, trade sources said, a move that comes while it continues to ramp up its third crude distillation unit (CDU).
The first cargo is expected to load between July 15 and 19, with volume at about 100,000 tonnes, while volumes to be lifted for subsequent months will be fixed at a later date, sources said. The tender closes on June 19.
However, Asia’s cash premium for VLSFO extended gains in recent sessions as prompt supply is expected to tighten on steady bunkering demand and limited blendstocks. The cash premium (MFO05-SIN-DIF) rose to $9.95 a tonne over Singapore quotes on Thursday.
The product’s front-month margin (LFO05SGDUBCMc1) was little changed, closing at a premium of $12.60 a barrel at the Asia close (0830 GMT).
Meanwhile, high sulphur fuel oil (HSFO) held relatively steady. The spot 380-cst HSFO cash premium (FO380-SIN-DIF) eased slightly at $2 a tonne over Singapore quotes, while front-month margin (FO380DUBCKMc1) climbed to a discount of $8.39 a barrel.
SINGAPORE INVENTORIES
Weekly residual fuel oil stocks climbed to seven-week highs at Singapore, with net imports more than doubling from the previous week, official data showed on Thursday.
Onshore fuel oil stocks (STKRS-SIN) rose 9% to 21.25 million barrels (3.35 million tonnes) in the week ended June 14, up for a third consecutive week, Enterprise Singapore data showed.
Weekly net imports, calculated by subtracting total exports from total imports, more than doubled to 797,000 tonnes.
OTHER NEWS
– Oil prices rose on Thursday after a plunge the previous day, as data showed a jump in refinery runs at the world’s top crude importer China, but a weak economic backdrop capped gains.
– China’s oil refinery throughput in May rose 15.4% from a year earlier, hitting the second-highest monthly total on record, data showed on Thursday, as refiners brought units back online from planned maintenance and independent refiners processed cheap imports
– The costs of chartering supertankers to move crude oil from the Middle East to Asia have jumped to the highest since April as more cargoes are being booked in June, according to industry sources and data on Refinitiv Eikon.
– A Turkish energy delegation will meet Iraqi oil officials in Baghdad on June 19, to discuss the resumption of Iraq’s northern oil exports, Iraqi deputy oil minister for upstream affairs, Basim Mohammed, told Reuters on Thursday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters