Spot premium for high sulphur fuel oil (HSFO) extended gains on Wednesday, though broader fuel oil supply is expected to edge higher this month.
The Singapore 380-cst HSFO cash premium was pegged above $23 a metric ton to cargo quotes, holding at its highest in more than one and a half years.
Backwardation held strong between the balance-month and April, though the strength on the rest of the forward curve was much milder in comparison, according to LSEG’s data.
Incoming supplies are ample, with total fuel oil arrivals in Asia expected to breach 6.5 million tons this month, up from less than 5 million tons last month, preliminary ship-tracking data showed on Wednesday.
Meanwhile, the very low sulphur fuel oil (VLSFO) market held largely rangebound in bearish fundamentals, though Singapore spot discounts narrowed.
Refining margins were broadly stable, with April VLSFO/Brent crack hovering at premiums near $8 a barrel, while 380-cst HSFO cracks dipped to discounts of about $3 a barrel, LSEG data showed.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) fell 6.2% to 9.75 million barrels (1.54 million tons) in the week to March 10, showed FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices edged up on Wednesday, buoyed by a weaker dollar, but mounting fears of a U.S. economic slowdown and the impact of tariffs on global economic growth capped gains.
– Canada could impose non-tariff measures such as restricting its oil exports to the United States or levying export duties on products if a trade dispute with the United States escalates further, Canada’s energy minister Jonathan Wilkinson said.
– European buyers are unlikely to return to Russia’s energy sector if sanctions are lifted, as the bloc has diversified its power mix with renewable energy and alternative gas suppliers, ministers and executives said at a conference in Houston.
– The ship’s captain arrested in connection with a crash into a U.S. flagged tanker off the coast of England is a Russian national, the German company which owns the vessel said on Wednesday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Two trades
– 0.5% VLSFO: No trade
Source: Reuters