Spot premiums for very low sulphur fuel oil (VLSFO) firmed in Asia on Wednesday, led by higher-priced bids for cargoes loading in August, though broader fundamentals were largely stable.
Singapore’s VLSFO cash premium was pegged at $5.85 a metric ton, while cracks for August LFO05SGDUBCMc1 were little changed at premiums of about $10.50 per barrel.
However, supplies for bunkering remained ample at Singapore, trade sources said, with spot premiums for delivered VLSFO remaining trapped near $10 per ton for several weeks.
Meanwhile, high sulphur fuel oil (HSFO) benchmarks were largely rangebound on Wednesday, with 380-cst cracks FO380DUBCKMc1 staying near discounts of $5 per barrel.
BUNKER SALES
Fujairah bunker sales slipped to a seven-month low in June, latest data from Fujairah Oil Industry Zone (FOIZ) published by S&P Global Commodity Insights showed.
The monthly volume eased 0.8% from May to about 605,000 tons in June, but was up 0.9% from the same month last year.
Total sales in the first half of 2024 were at 3.8 million tons, up 8% from the same period in 2023, as broader shipping tensions in the Red Sea lifted bunkering demand at key ports.
However, sales weakened in recent months as fuel oil supply tightened due to robust summer demand, while cheaper prices at neighbouring port Khor Fakkan continue to draw away some buying interest from Fujairah.
INVENTORY DATA
– Fujairah heavy fuel inventories FUJHD04 climbed 6.2% to 10.00 million barrels (1.58 million tons) in the week to July 15, reaching a five-week high, showed FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices slipped on Tuesday on worries about a slowing Chinese economy crimping demand, though a growing consensus that the U.S. Federal Reserve will begin cutting its key interest rate as soon as September limited declines. O/R
– Yemen’s Houthis targeted three vessels, including an oil tanker, in the Red and Mediterranean seas with ballistic missiles, drones and booby-trapped boats, they said on Monday.
– Russia might decide to reinstate a gasoline export ban from August should there be supply shortages on the domestic fuel market, Deputy Prime Minister Alexander Novak told reporters.
– Freeport LNG plans to restart one of three liquefied natural gas trains this week at its Texas facility after the company repairs some damage from Hurricane Beryl, it said.
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)