Cash premiums for fuel oil were steady in Asia on Tuesday amid thin trade, though heavy supply arrivals capped market recovery for the short-to-medium term.
Total fuel oil supplies to Asia could have breached 6 million tonnes this month, based on latest Refinitiv ship-tracking data, though some cargoes have yet to discharge and could spill into May arrival.
The heavy inflows continued to be dominated by a strong influx of Russian barrels, the data showed, though Middle Eastern exports to Asia appeared to have softened from the previous month.
Refining margins for 380-cst high sulphur fuel oil (FO380DUBCKMc1) retreated on Tuesday after climbing to 11-month highs the previous day, with the front-month crack dipping to a discount of $10.26 a barrel at the Asia close (0830 GMT).
Meanwhile, the margin for 0.5% very-low sulphur fuel oil (LFO05SGDUBCMc1) rose to a premium of $8.52 a barrel on Tuesday, while cash premium (MFO05-SIN-DIF) climbed for a third consecutive session to $4.57 a tonne over Singapore quotes. The premium has staged a mild rebound since early-April, but remains trapped in small single digits as ample supplies weighed.
OTHER NEWS
– Oil edged higher on Tuesday, supported by investor optimism that holiday travel in China would boost fuel demand and by expectations U.S. inventories would show a drop in crude stocks.
– Iraq’s northern oil exports showed few concrete signs of an imminent restart after a month of standstill, as aspects of an agreement between Baghdad and the Kurdistan Regional Government (KRG) have yet to be resolved, according to four sources.
– Global diesel margins have slumped by about half since February, dragging on refiners’ profits, as Russian exports continue despite sanctions, helping output from China and India reach all-time highs in March.
– BP’s 97,000 barrels per day refinery at Lingen in Germany was taken offline for a planned big revision in mid-April whose length cannot at this stage be revealed, operator BP said in a written note received on April 24.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters