Spot fuel oil premiums continued to ease on Wednesday, though a flurry of bids remained in the spot market but met with limited offers, especially on the high-sulphur front.

Singapore cash premium for 380-cst high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO) dipped day-on-day, while backwardation at the prompt months narrowed.

Margins also retreated with 380-cst HSFO crack closing at a discount near $3 a barrel, while VLSFO crack closed at a premium of $10.90 a barrel.

The recent strength in HSFO has stalled for now with industry sources eyeing a drop in Chinese demand, as fuel oil buying toughened for independent refineries amid tax and sanction challenges.

Meanwhile, South Korea’s S-Oil closed a tender offering two cargoes of slurry for February loading.

INVENTORY DATA

– Fujairah heavy fuel inventories (FUJHD04) fell 14.8% to 7.26 million barrels (1.14 million tons) in the week to Jan. 20, based on FOIZ data published by S&P Global Commodity Insights.

OTHER NEWS

– Oil prices dipped on Wednesday, extending the previous session’s declines, as markets weighed U.S. President Donald Trump’s declaration of a national energy emergency on his first day in office and eyed his tariff policies.

– Prices of Canadian and U.S. West Texas Intermediate crude oil to Asia jumped after shipping costs rallied on concerns that wider U.S. sanctions on the Russian fleet are tightening ship availability, trade sources said on Tuesday.

– Sri Lanka’s foreign minister said on Wednesday the South Asian island nation had signed an agreement with Chinese state energy giant Sinopec to fast-track a proposed $3.7 billion oil refinery in its southern port city of Hambantota.

– Port Freeport on Tuesday said it expects limited vessel activity, while Port Houston said all of its public facilities will remain closed through Wednesday as winter storm Enzo sweeps through Texas.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters