Asia’s high sulphur fuel oil (HSFO) market continued to ease on Wednesday, while the market eyed weaker import demand from China amid a higher import duty this year.
China’s fuel oil imports are expected to drop in early 2025 following a hike in the product’s import tax from Jan. 1, trade sources said.
This has already prompted some sellers to lower prices to boost demand, with spot offers for Russian M100 fuel oil softening in January versus December, sources said.
Singapore premiums for spot 380-cst HSFO dropped further, with the product trading lower for end-January to early-February loading dates, while backwardation narrowed further.
Meanwhile, cash premiums for very low sulphur fuel oil (VLSFO) remained narrow to cargo quotes, but showed some recovery.
Separately, Indonesia’s Pertamina closed a tender offering residual fuel for February loading on Wednesday.
INVENTORY DATA
– Fujairah heavy fuel inventories rose 18.9% to 8.93 million barrels (1.41 million tons) in the week to Jan. 6, based on FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices rose on Wednesday as supplies from Russia and OPEC members tightened, while U.S. crude oil stocks fell last week, market sources said, citing American Petroleum Institute figures.
– OPEC oil output fell in December after two months of increases, a Reuters survey found, as a drop from the United Arab Emirates due to field maintenance and from Iran offset a hike from Nigeria and other gains elsewhere in the group.
– Iran is pushing to recoup 25 million barrels of oil from China that has been stuck for six years in Chinese ports due to sanctions imposed by then-U.S. President Donald Trump, three Iranian and one Chinese source familiar with the matter said.
– India’s electricity generation grew at its slowest pace in 2024 since the COVID-19 pandemic, an analysis of federal grid regulator data showed, hit by a slowdown in the world’s fastest growing major economy.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: One trade
Source: Reuters