High sulphur fuel oil (HSFO) margins firmed to their highest in more than two years on Wednesday, based on data from LSEG, buoyed by strong buying interest on the derivatives front, according to market sources.
Dubai-basis cracks for 180-cst HSFO, which are typically in discounted territory, neared parity for the November contract at Wednesday’s Asia close, LSEG data showed.
Meanwhile, 380-cst cracks FO380DUBCKMc1 reached discounts near $3 a barrel on Wednesday.
The firmer cracks were led by the strength in the western barges market, according to sources.
Despite a recovery in supplies this month, spot premiums in Asia have inched higher this week as bids for November trended up for both high-sulphur and low-sulphur markets.
In tenders, India’s HPCL offered two cargoes of HSFO for loading in November, while Taiwan’s CPC sought a cargo of LSFO for December, based on data from sources.
FUJAIRAH DATA
– Fujairah heavy fuel inventories rose 2.1% to 8.56 million barrels (1.35 million tons) in the week to Oct. 21, hitting a five-week high, FOIZ data published by S&P Global Commodity Insights showed.
OTHER NEWS
– Oil prices fell after industry data showed U.S. crude inventories swelled more than expected, though declines were capped as the market watched diplomatic efforts in the Middle East after Israel continued attacks on Gaza and Lebanon.
– South Korea has decided to extend subsidy measures for oil products by two more months until the end of December, but with lower rates of tax cuts, the finance ministry said on Wednesday.
– Italian insurer Generali will no longer provide new cover for companies involved in oil and gas transportation, processing and distribution if they fail to have a good enough energy transition plan, a statement on its website said.
– Singapore LNG Corporation has agreed to charter from a unit of Japan’s Mitsui O.S.K. Lines a newly built floating storage and regasification unit as the island nation’s second import terminal for liquefied natural gas.
WINDOW TRADES O/AS
– 180-cst HSFO: One trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shreya Biswas)