Asia’s spot differentials for fuel oil eased on Thursday, with onshore inventories remaining plentiful in the Singapore hub.
Offers softened for both key grades. The 380-cst high sulphur fuel oil (HSFO) cash differential dropped to a discount of $6.25 a metric ton, while very low sulphur fuel oil (VLSFO) differential fell to a premium of $3.15 a ton.
Onshore fuel oil stockpiles have been holding above average levels for more than 10 weeks, hitting more than 24 million barrels in the week to July 30, Enterprise Singapore data showed.
Brazil was the top supplier to Singapore for the week, while most fuel oil outflows from Singapore headed to China.
The high inventories have continued to weigh on market structure and cracks for fuel oil in recent weeks.
INVENTORY DATA
– Singapore residual fuel inventories (STKRS-SIN) rose 4.1% to 24.67 million barrels (3.88 million metric tons) in the week to July 30, according to Enterprise Singapore.
OTHER NEWS
– Oil prices were little changed on Thursday as investors weigh the supply risks from U.S. President Donald Trump’s push for a swift resolution to the war in Ukraine through more tariffs, while a surprise build in U.S. crude stocks weighed on prices.
– The U.S. Treasury Department announced fresh sanctions on Wednesday on over 115 Iran-linked individuals, entities and vessels, in a sign the Trump administration is doubling down on its “maximum pressure” campaign after bombing Tehran’s key nuclear sites in June.
– Asia is expected to step up imports of U.S. West Texas Intermediate crude in the fourth quarter after Middle East oil prices strengthened and opened the arbitrage window, trade sources said.
– Energy companies operating in Brazil suspended oil shipments to the United States after President Trump announced 50% tariffs against the South American country, Roberto Ardenghy, president of oil lobby group IBP, told Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters