Asia benchmarks for very low sulphur fuel oil (VLSFO) posted monthly increases as of Friday, while Kuwait’s Al Zour sold its latest cargo at a narrower discount than the previous one, trade sources said.
Prompt-month VLSFO/Dubai crack closed at a premium of around $13.40 a barrel on the final trading day of the month, logging a monthly uptick of nearly 8%, based on data from LSEG.
Meanwhile, the VLSFO/Brent crack closed at a premium of about $14.15 a barrel, climbing over 24% month-on-month.
Spot cargo premiums firmed in the second half of the month before steadying this week, while bunker premiums on a delivered basis soared to their highest in over half a year.
Trade sources said they expect a tighter supply outlook for September amid some challenges in blending and obtaining on-specification fuels.
Meanwhile, Kuwait’s Al Zour sold its latest VLSFO cargo for end-September loading at a discount above $6.50 a metric ton to Singapore quotes, on a free-on-board Kuwait basis, said sources.
This was firmer compared with the previous cargo, which was sold at a discount nearer to $8.50 a metric ton.
INVENTORY DATA
– ARA inventories STK-FO-ARA were at 1.35 million tons in the week to Aug. 29, broadly stable from last week, data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Oil prices were on track for a weekly gain on Friday as Libyan output disruptions and Iraqi plans to curb production raised supply concerns, while data showing the U.S. economy grew faster than initial estimates eased recession fears.
– More than half of Libya’s oil production, or about 700,000 barrels per day, was offline on Thursday and exports were halted at several ports as a standoff between rival political factions over the central bank and oil revenue threatens to end a four-year period of relative peace.
– India’s Bharat Petroleum Corp plans to increase its integrated refining and petrochemical capacities within the next five to seven years to meet growing energy demand, Chairman G. Krishnakumar told shareholders.
– Shell plans to scale back its oil and gas exploration and development workforce by 20% as CEO Wael Sawan widens his cost-saving drive to the highly profitable division after deep cuts in renewables and low-carbon businesses, company sources said.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Krishna Chandra Eluri)