Spot premiums for very low sulphur fuel oil (VLSFO) slipped further on Wednesday, hitting their lowest in the year to date, dragged by slow refuelling demand from the bunkering sector.
The Singapore VLSFO cash premium dipped below $2 per metric ton to cargo quotes, while bunker premiums on a delivered basis remained stuck in a range of narrow premiums below $10 per ton, based on trade sources.
Meanwhile, high sulphur fuel oil (HSFO) retained its recent strength in a sentiment-driven rally.
This has narrowed the hi-5 marker (FO05-380SGMc1) in recent sessions, with the prompt spread contracting below $60 per ton on Wednesday, holding at multi-year lows.
Spot market activity has thinned this week, though HSFO spreads for 380-cst March/April widened day-on-day to $19.50 per ton as volatile trading continued on the derivatives patch.
Refining cracks for both grades inched lower on Wednesday. Prompt 380-cst HSFO crack (FO380BRTCKMc1) closed at a discount near 30 cents per barrel, while VLSFO crack fell to a premium of around $9.30 per barrel.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) fell 6.7% to 9.34 million barrels (1.47 million tons) in the week to Feb. 24, according to FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices rose marginally on Wednesday, bouncing off two-month lows hit in the prior session after an industry group reported U.S. crude stockpiles fell last week.
– Serbia is in last minute talks with the United States and Russia ahead of a Thursday deadline to avoid U.S. sanctions on oil company NIS that could result in crude supply cuts, Energy Minister Dubravka Djedovic Handanovic said on Wednesday.
– Plans due to be published by the European Commission on Wednesday could shave 45 billion euros ($47.3 billion) off the EU’s fossil fuel import bill this year, according to the EU executive’s analysis.
– Trading houses Vitol and Glencore will receive $380 million in compensation after their gas supplier, trading firm Taleveras, won a legal battle in a London court against Nigeria’s sole liquefied natural gas producer for non-delivery of cargoes, court documents seen by Reuters showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters