Spot fuel oil benchmarks edged higheron Tuesday amid a backdrop of active bidding for October-loading parcels, while backwardation widened at the prompt months for all key grades.
Singapore’s cash premium for very low sulphur fuel oil (VLSFO) rose above $20 a metric ton to cargo quotes, while delivered bunker premiums climbed nearer to about $30, according to market sources.
October cracks for VLSFO closed higher day-on-day at premiums of about $11.60 a barrel, based on LSEG’s data.
The market continued to eye prospects of supply recovery in the coming weeks, though tightness still lingered at the prompt dates, said sources.
INCOMING SUPPLIES
Fuel oil supplies arriving in Asia for September are expected to breach 5.6 million tons, inching higher from around 5.4 million tons in August, showed LSEG data this week.
These comprise more than 1.7 million tons of Middle Eastern inflows, about 2.4 million tons of western arbitrage barrels, and over 1.5 million tons of intra-Asia regional cargoes.
OTHER NEWS
– Oil prices were steady on Tuesday, after rising more than $1 in the previous session, as traders assessed concerns over U.S. production in the aftermath of Hurricane Francine and also the prospect of lower U.S. crude stockpiles.
– South Sudan and Sudan have made progress towards restarting the pumping of South Sudan’s crude oil through a pipeline running to a port in its neighbour, South Sudan’s finance minister and the president’s office said.
– Indian state retailers’ diesel sales fell in the first half of September from the previous month, preliminary sales data showed on Monday, as monsoon rains hit industrial activity and mobility.
– Petrobras’ new multi-year strategic plan will have greater focus on upstream operations than the previous one, the firm’s chief financial officer said on Monday, as the Brazilian oil giant looks to rebuild oil and gas reserves.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Two trades
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shreya Biswas)