Asia’s high sulphur fuel oil (HSFO) margin softened further on Tuesday, with prompt 380-cst HSFO-Dubai crack hitting a more than six-month low amid recent sell-offs.
The August 380-cst HSFO crack (FO380DUBCKMc1) closed at a discount of about $6 a barrel, while September crack (FO380DUBCKMc2) was at a discount of $4.50 a barrel at Asia close, based on LSEG data.
HSFO has remained pressured by heavy supplies coming to East Asia this year, trade sources said.
Prospects of slightly more demand, including summer power demand from the Middle East along with refinery feedstock demand from China, have failed to lift the market, according to sources.
Spot differentials for HSFO were rangebound in discounts on Tuesday. Meanwhile, differentials for very low sulphur fuel oil (VLSFO) logged smaller premiums in recent sessions.
Market activity for tenders was also broadly quiet, though Vietnam’s Nghi Son offered 5,000 tons of fuel oil for loading between August 5 and August 7. The tender closes on Tuesday, according to a website notice.
REFINING UPDATES
– Russia-backed Indian refiner Nayara Energy has reduced operations at its 400,000-barrel-per-day refinery in the aftermath of new European Union sanctions that targeted the firm, five sources familiar with the matter said.
OTHER NEWS
– Oil prices were steady on Tuesday amid uncertainty about the global economic outlook following the U.S.-EU trade deal, and as investors awaited the U.S. Federal Reserve’s interest rate decision.
– Saudi Arabia, the world’s biggest oil exporter, may hike crude oil prices for Asian buyers for the second month in a row, with September prices set to hit five-month highs on tight supply and robust demand, refining sources said.
– Average crude production in oil-rich Guyana declined to 664,000 barrels per day (bpd) in June from 667,000 bpd the previous month, the government said.
– Global commodity trading house Vitol Group paid $10.6 billion to employees who own shares in the company, through its annual share buyback scheme in 2024, company filings seen by Reuters showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters