Spot fuel oil differentials edged higher on Friday after market structure improved slightly at the prompt trading months.
Singapore cash differential for very low sulphur fuel oil (VLSFO) was pegged above $3 a metric ton on firmer bids for late-April and early-May loading dates, while backwardation widened for the balance-April/May contract.
Some trade sources said that marine fuel demand improved week-on-week as spot buying edged up due to a plunge in outright bunker prices, which trended lower in line with weaker upstream crude benchmarks.
Meanwhile, 380-cst high sulphur fuel oil (HSFO) also saw bids strengthening in the spot market, bringing cash differentials into a narrower discount at the end of the week.
Refining margins logged a weekly jump, supported by softer crude prices.
Singapore 380-cst HSFO crack (FO380BRTCKMc1) closed at a premium of 50 cents a barrel, while VLSFO crack (LFO05SGBRTCMc1) was at a premium near $9.75 a barrel, LSEG data showed.
As for spot tenders, Indonesia’s Pertamina offered residual fuel for loading in May.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) rose 4.0% to 1.07 million tons in the week to April 10, based on data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices rose on Friday after settling more than $2 a barrel lower in the previous session, but were set to drop for a second straight week on concerns over a prolonged trade war between the United States and China.
– The Trump administration imposed sanctions on Iranian oil trading networks on Thursday, including on a China-based crude oil storage terminal linked via a pipeline to an independent refinery, just days before talks between the U.S. and Iran.
– Saudi Arabia’s crude oil supply to China will surge in May from the month before as a sharp price cut by the kingdom boosts demand, sources said on Friday.
– Venezuela’s state oil company PDVSA has canceled several authorizations it had granted U.S.-based producer Chevron to load and export Venezuelan crude in April, three sources with knowledge of the decision said.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters