Asia’s fuel oil benchmarks were rangebound on Thursday amid a backdrop of largely thin trade, while high supplies continued to weigh on the market.
Spot premium for very low sulphur fuel oil (VLSFO) remained capped under $1 a metric ton to cargo quotes, while high sulphur fuel oil (HSFO) were also in thin premiums.
Singapore’s onshore inventories of fuel oil fell for a second straight week as some sellers were clearing inventories before the year ends, based on data and market sources.
However, fuel oil inflows remained strong, with storage volumes edging higher by 2.4% week-on-week to more than 900,000 tons. Most of the imports were from Indonesia, the Netherlands, and Russia, based on Enterprise Singapore.
Despite the weekly declines, the inventories continued to average higher than last month amid the strong inflows. The stockpiles averaged at 18.36 million tons so far in December, up from 18.15 million tons in November.
Meanwhile, refining margins held rangebound. Singapore’s VLSFO crack closed at premiums near $10 per barrel, while 380-cst HSFO cracks were at discounts of about $5.50 per barrel.
INVENTORY DATA
– Singapore onshore fuel oil stockpiles dropped 4.6% from the previous week to 17.92 million barrels (about 2.82 million metric tons) in the week to Dec. 11, data from Enterprise Singapore showed on Thursday.
OTHER NEWS
– Oil prices were little changed on Thursday as forecasts of weak demand and a higher-than-expected rise in U.S. gasoline and distillate inventories placed a lid on gains from an additional round of EU sanctions threatening Russian oil flows.
– Saudi Arabia’s crude oil supply to China is set to rebound to a three-month high in January, trade sources said on Thursday, thanks to price cuts by the world’s top exporter amid uncertainty over Iranian supplies.
– Russia’s state oil firm Rosneft has agreed to supply nearly 500,000 barrels per day (bpd) of crude to Indian private refiner Reliance in the biggest ever energy deal between the two countries, three sources familiar with the deal said.
– The Maritime and Port Authority of Singapore has launched an expression of interest to gather proposals for scaling up liquefied natural gas for bunkering or ship refuelling, it said in a statement on Thursday.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shailesh Kuber)