Asia fuel oil markets were largely stable on Friday in thin trade, while a key spread between two benchmark grades narrowed from last week.
The premium of very low sulphur fuel oil (VLSFO) over 380-cst high sulphur fuel oil (HSFO), commonly known as the hi-5 FO05-380SGMc1, closed below $90 a metric ton, narrowing about 7%, LSEG data showed.
The spread has shown a largely narrowing trend through the fourth quarter due to a weakening market for VLSFO.
Selling interest persisted in the spot VLSFO market, with multiple offers for January prevailing at narrow premiums to cargo quotes on Friday.
Meanwhile, the HSFO spot market held stable, though the derivatives front continued to see strength emerging for intermonth spreads trading.
Refining cracks for both fuel oil grades also extended weekly gains, with HSFO cracks firming via a steeper extent, based on LSEG data.
Singapore 380-cst HSFO cracks FO380DUBCKMc1 closed at discounts narrower than $4 per barrel on Friday, while VLSFO cracks LFO05SGDUBCMc1 closed at premiums above $10 per barrel.
INVENTORY DATA
– Fuel oil inventories in the ARA STK-FO-ARA inched 1% lower to 1.28 million tons in the week to Dec. 19, data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Oil prices fell on Friday on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down nearly 3%.
– U.S. crude oil exports to northwest Europe are likely to slip early next year after hitting a record high in November, as the arbitrage for transatlantic shipments has slammed shut and freight rates have climbed, analysts said this week.
– China’s fuel oil imports hit their highest in seven months for November, customs data showed on Friday, as more supply was drawn over for the bunker pool, according to industry sources.
– Venezuela’s state oil company PDVSA and India’s Reliance Industries have resumed an oil swap that had been paused due to U.S. sanctions on the South American country, an internal PDVSA document showed.
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 Varun H K)