Spot fuel oil benchmarks were slightly firmer on Tuesday, though the market eyed more high-sulphur supplies in the second half of June.
High sulphur fuel oil (HSFO) markets held steady in recent sessions, but some trade sources expect more supplies to head into storage tanks in the second half of next month as Chinese demand tapers off due to high prices.
Cash premium for 380-cst HSFO inched higher to about $10 a metric ton on Tuesday, while crack spreads narrowed to about $4.40 a barrel.
Meanwhile, the very low sulphur fuel oil (VLSFO) market also steadied following recent sell-offs, trade sources said.
Crack spread for VLSFO was little changed at premiums of about $8 a barrel on Tuesday.
Separately, Kuwait’s KPC offered two spot HSFO cargoes for loading in June. The tender closes on Wednesday, sources said.
INCOMING SUPPLIES
Fuel oil supplies to east Asia totalled less than 5.5 million tons this month, calculations based on ship-tracking data from LSEG Oil Research showed as of Tuesday.
Arrivals for May retreated for a second consecutive month, down from 5.5 to 6.0 million tons in April and a volume of over 7 million tons in March.
OTHER NEWS
– Global oil prices steadied on Tuesday as the prospect of OPEC+ maintaining oil supply curbs at its June 2 meeting and hopes of strong U.S. summer fuel demand balanced concerns about higher-for-longer U.S. interest rates.
– Abu Dhabi’s AD Ports Group has signed an agreement with two companies to develop a green methanol storage and export facility in Egypt that will pave way for supplying low-carbon fuels for maritime transport.
– European Union countries approved a law to impose methane emissions limits on Europe’s oil and gas imports from 2030, pressuring international suppliers to cut leaks of the potent greenhouse gas.
– Russia will build a small nuclear power plant in Uzbekistan, the first such project in post-Soviet Central Asia, Uzbek President Shavkat Mirziyoyev said on Monday at a meeting with visiting Russian President Vladimir Putin.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Varun H K)