Asia’s fuel oil markets continued to be barren of deals on Friday, as thin trading liquidity on the window persisted against a backdrop of consistently bearish outlooks for January.
Ample inventories will continue to be a near-term market driver, multiple trade sources said.
Fuel oil arrivals into Singapore are still slated to hit a fresh high in December of above 3.4 million metric tons, LSEG shiptracking data showed.
Some off-spec crude cargoes from west Africa will likely add on to these pool of availability, especially for very low sulphur fuel oil, one trade source said, adding that overall Brazil-origin arrivals are also high since a few weeks earlier.
Cash premiums for VLSFO declined further to slightly below $2 per ton, as lower-priced offers emerged despite the market’s backwardation slightly widening from the previous trading session.
Meanwhile, premiums for 380-cst high sulphur fuel oil gained slightly to around $4.75 per ton, mostly reflect the wider backwardation given a persistent buy-sell gap.
The hi-5 spread (FO05-380SGMc1) widened slightly from a week earlier to around $95 per ton, but was little changed from the previous trading session.
INVENTORIES
– Residual fuel stockpiles held at Fujairah Oil Industry Zone were nearly at a fouth-month high of 9.96 million barrels for the week ended Dec. 23, according to industry information service S&P Global Commodity Insights.
OTHER NEWS
– China’s industrial profits fell at a slower clip in November, official data showed on Friday, but the annual decline in earnings this year is expected to be the worst in over two decades due to persistently soft domestic consumption.
– India’s Bharat Petroleum Corp plans to invest $11 billion in southern Andhra Pradesh state for a new refinery and petrochemical project to meet rising fuel demand in the world’s fastest-growing major economy, its chairman said.
– Mexican state energy company Pemex PEMX.UL resumed refining operations at is new Olmeca refinery in November, working at nearly 17% of its 340,000-barrel-per-day (bpd) capacity after being fully offline in October, official numbers showed this week.
– Major European energy companies doubled down on oil and gas in 2024 to focus on near-term profits, slowing down – and at times reversing – climate commitments in a shift that they are likely to stick with in 2025.
– Oil prices rose slightly on Friday and were on track for a weekly rise, spurred by expectations economic stimulus efforts will prompt a recovery in China, while a stronger dollar capped gains.
WINDOW TRADES
– 180-cst HSFO: no deal
– 380-cst HSFO: no deal
– 0.5% VLSFO: no deal
Source: Reuters