Strength in the high sulphur fuel oil (HSFO) market pared marginally by the end of the trading week, with backwardation narrowing from recent highs.

The balance-month backwardation for Singapore 380-cst HSFO remained steep above $20 a metric ton, though easing from the previous session.

Cash premium was adjusted lower at $21.50 a metric ton on Friday, though bids held strong into April loading dates.

Meanwhile, the very low sulphur fuel oil (VLSFO) market held steadily in spot discounts.

Weak demand has weighed on the market since the start of the year, dragging premiums down, trade sources said.

Latest data from the Singapore port authority showed that marine fuel sales fell to their lowest in 20 months during February.

Volumes at the world’s top bunker hub totalled 4.15 million metric tons, down 7.1% month on month.

INVENTORY DATA

– ARA fuel oil inventories (STK-FO-ARA) dipped 0.9% to 1.21 million tons in the week to March 13, based on data from Dutch consultancy Insights Global.

OTHER NEWS

– Oil prices rebounded on Friday to recover some of their losses of more than 1% in the previous session, partly due to the diminishing prospects of a quick end to the Ukraine war that could bring back more Russian energy supplies.
– Chinese state oil companies are shying away from Russian oil this month, with two importers halting purchases while two others scaled back volumes as they assess compliance following recent U.S. sanctions on Moscow, multiple trade sources said.
– The United States imposed sanctions on Thursday on Iran’s Oil Minister Mohsen Paknejad and some Hong Kong-flagged vessels that are part of a shadow fleet that helps disguise Iranian oil shipments, the Treasury Department said.
– BP BP. plans to explore for new oil fields in the Azeri Caspian Sea, BP’s upstream chief Gordon Birrell told Reuters.

WINDOW TRADES

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