Asia’s very low sulphur fuel oil (VLSFO) market softened on Monday amid expectations of ample supply in July, while firmer bidding from a couple of trade participants tapered off recently.
The Singapore VLSFO cash premium traded lower to $4.50 a metric ton, while cracks for August dipped below premiums of $10 a barrel on Monday, down from last week, showed LSEG data.
The market had rebounded last week, though the upward price action has cooled off amid a backdrop of sufficient inventories and lukewarm bunkering demand.
Trade sources are monitoring loadings from Kuwait’s al-Zour and Nigeria’s Dangote following recent fire incidents, though there is no notable disruption to exports for now.
Meanwhile, Indonesia’s Pertamina had offered more V-1250 low sulphur waxy residue for loading from Balikpapan in mid-July, shipping records showed. The company’s crude distillation unit IV is yet to restart as of late June.
High sulphur fuel oil (HSFO) benchmarks held stable. Spot 380-cst premiums closed at $4.80 a ton on Monday, while cracks FO380DUBCKMc1 slipped to discounts of about $6.70 a barrel.
OTHER NEWS
– Oil prices climbed on Monday, supported by forecasts of a supply deficit stemming from peak summer fuel consumption and OPEC+ cuts in the third quarter, although global economic headwinds and rising non-OPEC+ output capped gains.
– Trading houses Trafigura and Gunvor bought nine cargoes of crude that underpin the international Brent benchmark in the last week and bid for more, helping to drive the steepest gains since a change in the way it was assessed in 2023.
– A limited fire broke out in a storage area belonging to Kuwait’s al-Zour refinery, but production was not affected, state-owned Kuwait Integrated Petroleum Industries Company (KIPIC) said on Saturday.
– A Chinese radio station on Monday started broadcasts on Arctic sea ice conditions off Russia’s coast for vessels sailing the Northeast Passage, as China seeks to further utilise the world’s northernmost routes as alternatives to the Suez Canal.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh)