Spot differential for high sulphur fuel oil (HSFO) flipped back into a premium in Asia on Tuesday, after sinking into a discount since the start of April.
Bids for Singapore 380-cst HSFO rose to premiums over cargo quotes, with a trade done at $3 a metric ton. Backwardation for the product is also supported on the forward curve, with the June/July intermonth spread for 380-cst HSFO holding near $13 a ton.
The HSFO market typically enters a season of strength towards the end of the second quarter, buoyed by peak power generation demand in the Middle East.
Refining margins for HSFO also climbed, with cracks for May (FO380BRTCKMc1) closing at premiums near $1 a barrel, LSEG data showed.
Meanwhile, the very low sulphur fuel oil (VLSFO) was steady to firmer. The product crack (LFO05SGBRTCMc1) held stable near premiums of $9 a barrel.
As for recent tenders, Taiwan’s CPC offered 30,500 tons of catalyst fractionator bottoms for May loading.
FUJAIRAH DATA
– Fujairah heavy fuel inventories (FUJHD04) fell 3.4% at 10.62 million barrels (1.67 million tons) in the week to April 21, showed FOIZ data, published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices climbed more than 1% on Wednesday, as investors weighed a fresh round of U.S. sanctions on Iran, a drop in U.S. crude stocks and a softer tone from President Donald Trump towards the Federal Reserve and his tariff war with China.
– Saudi Arabia and India agreed to boost cooperation in supplies of crude and liquefied petroleum gas, according to a joint statement reported by the Saudi state news agency on Wednesday following a visit by Prime Minister Narendra Modi.
– BP may be forced to cut or even scrap its share buyback programmes over the next year unless oil prices recover, analysts say, adding that would increase pressure on its already underperforming shares.
– Dutch tank storage group Vopak has received conditional approval for the initial public offering of its Indian joint venture Aegis Vopak from the country’s markets regulator, the group said on Wednesday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters