Spot fuel oil benchmarks in Asia remain capped by high inventories at key trading hubs as of Thursday, with ample incoming supplies limiting recovery, trade sources said.
High sulphur fuel oil (HSFO) differentials held steadily in discounts to cargo quotes. Meanwhile, very low sulphur fuel (VLSFO) differentials eased to smaller premiums day-on-day.
Inventories of fuel oil continued to build at key hubs of Singapore and Fujairah, latest data showed this week. Onshore stockpiles in Singapore climbed to over six-month highs, remaining above average levels as imports continued to rise.
Fuel oil demand from the bunker sector remained tepid, though some sources eyed slightly more demand from refineries for feedstock due to weaker cracks recently.
HSFO cracks for 380-cst fuel (FO380BRTCKMc1) closed at discounts near $2 a barrel, while VLSFO cracks hovered near premiums of $10 a barrel, based on LSEG data.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) rose 14.6% to 10.26 million barrels (1.41 million tons) in the week to July 7, FOIZ data published by S&P Global Commodity Insights showed.
– Singapore residual fuel inventories (STKRS-SIN) rose 5.7% to 24.71 million barrels (about 3.89 million metric tons) in the week to July 9, based on Enterprise Singapore.
OTHER NEWS
– Oil prices declined moderately on Thursday as investors weighed the potential impact of U.S. President Donald Trump’stariffs on global economic growth.
– U.S. President Donald Trump launched his global tariff assault into overdrive on Wednesday, announcing a new 50% tariff on U.S. copper imports and a 50% duty on goods from Brazil, both to start on August 1.
– Global commodities trading house Gunvor intends to mothball the terminal activities at its Europoort oil refinery in Rotterdam, Netherlands, a company spokesperson said.
– Nigeria’s Dangote petroleum refinery will construct storage tanks in Namibia to hold at least 1.6 million barrels of gasoline and diesel to supply refined fuel to southern Africa, two sources told Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: Three trades
Source: Reuters