Spot benchmarks for fuel oil were little changed on Wednesday in largely thin trade, while the market structure pared back after firming slightly in recent sessions.
Singapore cash premium for very low sulphur fuel oil (VLSFO) held near $2 per metric ton, while 380-cst high sulphur fuel oil (HSFO) premium closed at slightly above $4 per metric ton.
The market structure for both key fuel oil grades eased back on Wednesday, with January-February backwardation narrowing day-on-day.
Some strength emerged for refining cracks, which traded higher for both grades, but traders and analysts expect overall benchmarks to be capped going into early 2025 due to bearish fundamentals.
Meanwhile, the Singapore hi-five spread FO05-380SGMc1 remained narrow, closing at about $95 per ton, based on LSEG data.
FUJAIRAH DATA
– Fujairah heavy fuel inventories FUJHD04 climbed 35% to 8.66 million barrels (1.36 million tons) in the week to Dec. 16, hitting a four-week high, FOIZ data published by S&P Global Commodity Insights showed.
– Marine fuel sales at Fujairah fell to their lowest in 17 months in November, latest data showed. Competitive prices at Khor Fakkan drew some demand away, while recent geopolitical tensions continued to keep sentiment cautious.
OTHER NEWS
– Oil prices edged higher on Wednesday as investors remained cautious ahead of an expected interest rate cut by the U.S. Federal Reserve, while weighing up the potential supply impact of tighter sanctions on Russia.
– Britain sanctioned 20 ships on Tuesday for allegedly carrying illicit Russian oil, its latest measures targeting Russia’s so-called shadow fleet in response to the 2022 invasion of Ukraine.
– OPEC+ is wary of a renewed rise in U.S. oil output when Donald Trump returns to the White House, delegates from the group said, because more U.S. oil would further erode OPEC+ market share and hamper the producer group’s efforts to support prices.
– A U.S. government funding bill released on Tuesday included a plan that would allow year-round sales of gasoline with a higher ethanol blend, a major win for the corn and ethanol lobbies.
WINDOW TRADES
– 180-cst HSFO: One trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Mohammed Safi Shamsi)