Spot fuel oil premiums in Asia edged up on the first trading day of 2025, buoyed by stronger-priced bids, though inventories remained high at oil hub Singapore.
Onshore fuel oil storage volumes dropped slightly from the previous week, but remained well above 20 million barrels amid strong inflows from Russia and the United Arab Emirates, data showed on Thursday.
The market is eyeing capped recovery in price benchmarks at the start of 2025 due to the ample supply backdrop.
The Singapore cash differential for very low sulphur fuel oil (VLSFO) was pegged higher on Thursday but held at a narrow premium below $3 a metric ton to cargo quotes.
Meanwhile, a spot deal emerged for 380-cst high sulphur fuel oil (HSFO) on Thursday, with the product trading higher at $8 a metric ton to cargo quotes.
Refining margins held largely stable. Front-month VLSFO cracks (LFO05SGDUBCMc1) closed at premiums slightly above $10 per barrel, while 380-cst HSFO cracks (FO380DUBCKMc1) were at discounts of about $5.25 per barrel, based on LSEG data.
In tenders, Pakistan’s PARCO offered 50,000 tons of HSFO for loading in mid-January. The tender closes on Thursday, based on a document on its website.
INVENTORIES
– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 20.96 million barrels (3.30 million tons) in the week to Jan. 1, dipping 4% from last week, data from Enterprise Singapore showed.
– Fujairah heavy fuel inventories (FUJHD04) fell 24.7% to 7.50 million barrels (1.18 million tons) in the week to Dec. 30, based on FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices nudged higher on Thursday, the first day of trade for 2025, as investors returning from holidays cautiously eyed a recovery in China’s economy and fuel demand following a pledge by President Xi Jinping to promote growth.
– Russian gas exports via Soviet-era pipelines running through Ukraine came to a halt on New Year’s Day, marking the end of decades of Moscow’s dominance over Europe’s energy markets.
– The Ukrainian military said on Tuesday its forces had hit a Russian oil depot in the western Smolensk region, setting fire to tanks storing oil products.
– Nigeria will require applicants for oil licences and permits to show evidence of low carbon emissions and a renewable energy program from Wednesday before approvals are granted, the head of its upstream regulatory agency said.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters