Spot premiums for very low sulphur fuel oil (VLSFO) softened in Asia on Friday, while the market eyed cautious demand for bunkering following a recent oil spill in Singapore.
Broader bunkering operations remained largely unaffected, market sources said, though demand was slow during the week.
Marine fuel suppliers were reminded to keep the vessel hulls of their bunker barges clean when entering storage terminals to lift fuel, sources said.
Meanwhile, spot demand for marine fuel was tepid in the week. Some vessels were cautious about entering the port amid concerns of oil stains, a source from a shipping company said.
The oil spill happened after a Netherlands-flagged dredger struck a stationary Singapore-flagged bunker vessel on June 14 in the southern port of Pasir Panjang.
So far, price premiums of VLSFO bunker fuel at Singapore have been largely stable week-on-week, holding slightly above $10 a metric ton, based on data from market sources.
However, cargo premiums of VLSFO remained depressed, trading lower to $1 a ton on Friday, while high-sulphur premiums held largely unchanged at the end of the trading week.
Refining margins for fuel oil were broadly stable, with VLSFO cracks holding near premiums of $9 a barrel and HSFO 380-cst cracks FO380DUBCKMc1 hovering at discounts of about $5 a barrel, based on LSEG data.
INVENTORY DATA
– ARA inventories STK-FO-ARA fell 4.1% to 1.51 million tons in the week to June 20, hitting a 10-week low, data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Crude oil futures were little changed on Friday but were set to rise for a second week amid signs of improving demand and falling oil and fuel inventories in the U.S. O/R
– European Union countries agreed on a 14th package of sanctions against Russia over its war in Ukraine, diplomats said on Thursday, including their first restrictions on Russian gas.
– Mexico’s state energy company Pemex will start processing crude oil in its new Olmeca refinery in the port of Dos Bocas in the second half of the year, Chief Executive Officer Octavio Romero said.
– BP has agreed to buy grain trader Bunge’s 50% stake in Brazilian sugar and ethanol joint venture BP Bunge Bioenergia for $1.4 billion in a bet on growing demand for low-carbon biofuels.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Sohini Goswami)