Asia’s high-sulphur fuel oil (HSFO) market extended gains on Wednesday as stronger bids emerged, even as supplies to the East of Suez are unlikely to tighten in the coming weeks, with some tenders underway, traders said.
Cash differential for 380-cst HSFO climbed to a premium of $6.63 a metric ton on Wednesday, while front-month margin firmed to a discount of $6.10 a barrel at the Asia close (0830 GMT).
In tenders, Pakistan’s PARCO offered HSFO for July loading, underlining an ongoing shift in market dynamics as the South Asian country turned to exporting instead of importing fuel oil this summer. Exports have so far gone to Singapore and the United Arab Emirates this year.
Separately, Philippines SL Harbour issued a tender seeking HSFO for August delivery.
Both tenders close on Tuesday.
Meanwhile, the cash premium for very-low sulphur fuel oil (VLSFO) continued to ease on Wednesday, underpinned by expectations of steady arbitrage arrivals into July and August.
Cash differential for 0.5% VLSFO edged lower to a premium of $9.92 a ton, while front-month margin closed at a premium of $9.96 a barrel.
FUJAIRAH INVENTORIES
Fuel oil inventories at Fujairah FUJHD04 rose 3% to 10.40 million barrels (1.64 million tons) in the week to July 3, extending gains for a third straight week, based on Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil benchmark Brent fell on Wednesday, reversing gains made after Saudi Arabia and Russia announced they would extend and deepen output cuts into August, as concerns over a global economic slowdown weighed on market sentiment.
– The Russian budget’s oil and gas revenues declined by 26.4% in June, year on year, to 528.6 billion roubles ($5.88 billion), according to finance ministry data published.
– Additional oil output and export cuts made by Saudi Arabia and Russia earlier this week should be enough to help balance the oil market, United Arab Emirates’ energy minister Suhail Al Mazrouei told reporters.
– India will put up barriers in green hydrogen trade in response to other nations imposing restrictions, the nation’s renewable energy ministry said at a conference.
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 Maju Samuel)