Asia’s spot differential for high sulphur fuel oil (HSFO) narrowed in discounts on Tuesday, while Kuwait offered a cargo for loading in May.
KPC offered 60,000 tons of HSFO for loading between May 13 and 14, via a tender that closes on Tuesday.
The HSFO market is expected to retain some strength into May due to seasonal drivers, as the Middle East prepares to enter peak summer demand for power generation.
Meanwhile, the spot differential for very low sulphur fuel oil (VLSFO) also inched higher, though trading momentum thinned out compared to the previous day.
Refining margins for fuel oil rose slightly. Singapore cracks for 380-cst HSFO (FO380BRTCKMc1) closed at premiums of 55 cents a barrel, while cracks for VLSFO (LFO05SGBRTCMc1) closed at premiums near $9 a barrel on Tuesday, based on LSEG data.
REFINERY UPDATES
– U.S. oil refiners are expected to have about 1.2 million barrels per day of capacity offline in the week ending April 25, increasing available refining capacity by 402,000 bpd, research company IIR Energy said.
– French oil major TotalEnergies will shut its oldest steam cracker in Antwerp by end-2027, the company said on Tuesday, citing a “significant surplus of ethylene expected in Europe”.
OTHER NEWS
– Oil prices rose on Tuesday as investors took advantage of the previous day’s losses to cover short positions, though concerns persist over economic headwinds from tariffs and U.S. monetary policy that could dampen fuel demand.
– The share of OPEC oil in India’s imports fell to a record low in fiscal year 2024-25 as refiners continued to gorge on cheaper oil from Russia, the top oil supplier to New Delhi for the third straight year, data obtained from trade and industry sources showed.
– China National Offshore Oil Corporation has agreed to a term deal to buy liquefied natural gas from Abu Dhabi National Oil Corp, the third supply contract the Middle Eastern energy exporter signed with Chinese buyers over the weekend, according to two Chinese trading sources and a state media report.
– The global liquefied petroleum gas market is facing an upheaval as high tariffs on U.S. imports force Chinese buyers to swap American cargoes for alternatives from the Middle East, while U.S. shipments divert to Europe and elsewhere in Asia.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters