Asia high sulphur fuel oil (HSFO) cracks remained supported in a round of strong bidding on Wednesday, trade sources said.
Singapore’s 380-cst HSFO/Dubai crack for June closed at a premium of $4.44 a barrel, holding near record highs hit last week, based on LSEG data. Meanwhile, the HSFO/Brent crack for June closed at a fresh high on Wednesday near $3.90 a barrel.
HSFO is expected to retain strength for June and July due to seasonal market strength for summer power burn, though the recent rally was driven more by position taking, sources said.
Spot benchmarks in Asia continued to be weighed by adequate supply availability, with HSFO cash differentials hovering near parity to cargo quotes, while bunker premiums remained under pressure.
Separately, Bahrain’s BAPCO offered a vacuum gasoil cargo for loading from Sitra between June 5 and 10, according to trade sources. The tender closes on Wednesday and is valid until Friday.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) rose 17.7% to 10.99 million barrels (1.73 million tons) in the week to May 19, showed FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices rose more than 1% on Wednesday after reports of Israel preparing a strike on Iranian nuclear facilities, raising fears that a conflict could upset supply availability in the key Middle East producing region.
– Kazakhstan’s oil production has risen by 2% in May, an industry source said on Tuesday, an increase that defies pressure from OPEC+ on the Central Asian country to reduce its output.
– Indonesia’s Pertamina has been importing Russian crude since last year to its refineries, the CEO of Pertamina’s refinery unit said at a conference on Wednesday.
– An expected stronger hurricane season than average raises the risk of weather-related production outages in the U.S. oil industry, the U.S. Energy Information Administration said on Tuesday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Two trades
Source: Reuters