Spot fuel oil trade was largely quiet on Wednesday at month’s end, while market structure also weakened.
The Singapore August/September spread for the 0.5% low sulphur fuel oil narrowed back to less than $8 per metric ton on Wednesday, after widening beyond that on Tuesday, based on data from market sources.
Meanwhile, the intermonth spread for 380-cst high sulphur fuel oil also narrowed, closing at about $10 per ton compared with more than $12 per ton the previous day.
The markets are expected to retain support in the short term amid tightness in overall arbitrage inflows, according to market sources and analysts.
However, some regional supply was still available. In tenders, India’s IOC had offered HSFO for loading at Chennai port between Aug. 17 and 18, closing on Wednesday.
INVENTORY DATA
– Fujairah heavy fuel inventories rose 3.0% to 9.70 million barrels (1.53 million tons) in the week to July 29, showed FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil futures rebounded on Wednesday after the killing of a Hamas leader in Iran ratcheted up tensions in the Middle East, but prices remain under pressure from concerns about weak China demand.
– An OPEC+ panel is unlikely this week to make any changes to its current deal to cut production and to start unwinding some cuts from October, despite recent sharp declines in oil prices, five sources from the producer group told Reuters.
– Russian shipping company Sovcomflot has started this year’s transportation of Urals crude oil to Asia via the Northern Sea Route, according to market sources and LSEG data, as melting ice opens the Arctic route for transit shipments.
– BP increased its dividend and extended its share repurchasing programme on Tuesday as it reported a forecast beating second-quarter profit of nearly $2.8 billion, with weak refining offset by stronger oil prices and retail earnings.
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 Mrigank Dhaniwala)