The cash premium for 0.5% very low sulphur fuel oil (VLSFO) edged lower for an eighth consecutive trading day, while inventories extended a build up at key trading hub Singapore.
Despite lower weekly imports, onshore fuel oil inventories hit one-month highs in Singapore, latest data showed on Thursday, while overall supplies remained ample in the Asia region.
The 0.5% VLSFO cash premium MFO05-SIN-DIF slipped further to $14 a metric ton on Thursday, while the refining margin LFO05SGDUBCMc1 closed at a premium of $10.17 a barrel.
Meanwhile, high sulphur fuel oil (HSFO) was little changed on the back of thin activity.
The 380-cst HSFO cash differential FO380-SIN-DIF continued to hold in a discount.
Refining margin for the HSFO grade FO380DUBCKMc1 fell to a discount of $16.88 a barrel at the Asia close amid a backdrop of bearish factors.
SINGAPORE INVENTORIES O/SING1
Onshore fuel oil inventories STKRS-SIN rose 0.7% to 19.54 million barrels (3.08 million metric tons) in the week to Oct. 25, data from Enterprise Singapore showed.
Earlier this month, a stronger market backwardation had spurred selling interest and discouraged storage, though the backwardation had narrowed in recent trading sessions.
However, a sharp drop in net fuel oil imports capped the extent of the weekly inventory build up. Net imports fell by nearly 75% week-on-week to 233,000 tons.
OTHER NEWS
– Oil prices fell on Thursday after a rise in U.S. crude stockpiles and a climb in the dollar index, giving up some ground gained a day earlier when prices jumped on Middle East tensions.
– Venezuela’s PDVSA has signed at least two new spot contracts to export fuel oil and asphalt cement, demanding prepayment in euros from customers, according to company documents seen by Reuters on Wednesday.
– U.S. penalties on shippers transporting Russian oil in breach of the G7’s price cap could push more Russian cargoes onto vessels referred to as the ghost fleet and away from mainstream tankers, shipping sources and analysts told Reuters.
– Shell will cut at least 15% of the workforce at its low-carbon solutions division and scale back its hydrogen business as part of CEO Wael Sawan’s drive to boost profits, it said on Wednesday.
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 Sonia Cheema)