Asia’s very low sulphur fuel oil (VLSFO) market came under further pressure on Thursday, after Kuwait’s Al Zour refinery issued its first spot sales tender in more than three months.
The refinery issued the tender on Thursday offering 130,000 metric tons of VLSFO with maximum sulphur content of 0.5%, said trade sources.
The cargo is expected to load between Jan. 20 and Jan. 21, while the tender closes on Friday.
VLSFO prices softened in Asia. Singapore’s cash premium MFO05-SIN-DIF fell to $3.75 a metric ton, approaching a four-month low, while front-month cracks edged lower to premiums of about $12 a barrel.
The market was also under pressure amid ample inventories and tepid demand for marine bunkers, based on data and trade sources.
Singapore onshore stocks recently rose to five-month highs, latest official data showed. Meanwhile, bunker premiums have also been largely stagnant at top bunker hub Singapore amid tepid demand this week, traders said.
On the high-sulphur fuels front, a recent rally stalled. The 380-cst cash premium FO380-SIN-DIF eased to $7.16 a ton, while cracks also weakened.
Separately, Malaysia’s Pengerang Complex offered atmospheric residue for end-January loading via a tender that closes on Jan. 4, while Vietnam’s Nghi Son offered fuel oil for loading in mid-January via a tender that closes on Jan. 8.
SINGAPORE INVENTORIES O/SING1
Fuel oil stocks STKRS-SIN were at 22.31 million barrels (3.51 million metric tons) in the week to Jan. 3, up 5.8% week-on-week, latest Enterprise Singapore data showed.
OTHER NEWS
– Oil rose on Thursday, adding to gains in the previous session on concerns over Middle Eastern supply following disruptions at an oilfield in Libya and heightened tensions related to the Israel-Hamas war.
– Local protests have forced a full shutdown of production at Libya’s Sharara oilfield, which can produce up to 300,000 barrels per day, two engineers told Reuters on Wednesday.
– Several Saudi Arabian companies released regulatory filings late on Wednesday and Thursday saying state energy company Saudi Aramco’s decision to raise feedstock and fuel prices for this year will raise production costs and lower earnings.
– Venezuela’s oil exports increased 12% last year to almost 700,000 barrels per day as the United States eased sanctions imposed since 2019 on the OPEC country’s energy sector, according to data and documents viewed by Reuters.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: Four trades
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shounak Dasgupta)