Spot premiums for high sulphur fuel oil (HSFO) dipped on Wednesday amid a backdrop of heavy supply arrivals, while the market structure weakened at the prompt trading months.
Singapore cash premium for 380-cst HSFO was pegged at $12.75 a metric ton, reflecting a narrower backwardation for the December-January contract. Meanwhile, the market for very low sulphur fuel oil (VLSFO) held stable to softer.
Supply arrivals from the Middle East and Russia are expected to remain heavy into December, some traders said.
Regional supplies also remained plentiful. Thailand’s PTT offered two cargoes of HSFO for loading in December, according to traders.
Refining margins were rangebound amid broadly stable crude prices. VLSFO cracks dipped below premiums of $12.50 a barrel, while 380-cst HSFO cracks closed at discounts of about $5.25 a barrel, based on LSEG data at 0830 GMT.
INVENTORY DATA
– Fujairah heavy fuel inventories FUJHD04 rose 5.2% to 9.15 million barrels (1.44 million tons) in the week to Nov. 18, hitting a two-month high, FOIZ data published by S&P Global Commodity Insights showed.
OTHER NEWS
– Oil slipped on Tuesday, pressured by the restart of production at Norway’s Johan Sverdrup oilfield, although investor caution arising from fears of an escalation in the Russia-Ukraine war limited the decline.
– Iraq’s fuel oil exports are on track to hit all-time highs this year after the country ramped up shipments in October, as domestic demand eased while output rose, according to industry sources and ship-tracking data.
– China’s fuel oil imports for October rose to their highest in five months, customs data showed on Wednesday.
– President-elect Donald Trump’s incoming administration plans to roll back federal regulations championed by President Joe Biden that aim to make automobiles more fuel-efficient and incentivize a shift toward electric vehicles, according to two sources in contact with Trump’s transition team.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Krishna Chandra Eluri)