Asia’s high sulphur fuel oil (HSFO) benchmarks clung to its recent strength on Thursday, with spot premiums and inter-month spreads widening amid volatile trading.
Spot trades continued to emerge for 380-cst HSFO, with cash premiums holding strong into early April.
Backwardation widened sharply at the prompt curve, rising beyond $23 a metric ton, compared with about $18 in the previous session.
The strength held despite higher cargo arrivals eyed for March, led by an increase in inflows from the Middle East as well as arbitrage barrels, according to trade sources.
As for very low sulphur fuel oil (VLSFO), spot differentials remained in discounts amid bearish market drivers, with contango persisting at prompt months.
Refining margins rebounded on Thursday, with April VLSFO/Brent crack closing at premiums above $8 a barrel, while 380-cst HSFO/Brent cracks closed at discounts of about $2.60 a barrel, LSEG data showed.
INVENTORY DATA
– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 15.47 million barrels (2.44 million tons) in the week to March 5, hitting its lowest in 18 weeks, Enterprise Singapore data showed.
– Fujairah heavy fuel inventories (FUJHD04) climbed 11.3% to 10.40 million barrels (1.64 million tons) in the week to March 3, according to latest FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices rose on Thursday after heavy sell-offs drove the market to a multi-year low, however, tariff uncertainties and a rising supply outlook capped gains.
– Mexican fuel oil cargoes are heading to Asia and Europe this month as higher prices draw supply, while traders eye more diversions after U.S. President Donald Trump imposed tariffs on imports this week, trade sources and analysts said.
– Global independent storage operator Vopak said on Thursday it would expand its joint-venture terminal in Thailand to handle U.S. ethane imports for state energy firm PTT Global Chemical PTTGC from 2029.
– U.S. exports of crude oil to India last month climbed to their highest in more than two years, ship tracking data showed, as refiners in the country sought alternative supplies following tighter U.S. sanctions on Russian producers and tankers.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Two trades
– 0.5% VLSFO: One trade
Source: Reuters