Spot premiums for fuel oil were rangebound in Asia on Thursday, while market participants eyed a rare vacuum gasoil (VGO) tender from India’s Nayara Energy.
The private refiner had offered 70,000 metric tons of VGO with maximum 3% sulphur content for loading in September, trade sources said, while the last time it exported VGO was in December 2022.
The cargo is scheduled to load from Vadinar port and the tender closes on Thursday with same-day validity.
Meanwhile, spot premiums for fuel oil edged higher from the previous day amid a drawdown in onshore inventories in Singapore this week.
The stockpiles fell to a six-week low, driven by a slump in imports into onshore tanks by more than 50% compared to the previous week, official data showed.
Cash premium for the low-sulphur (VLSFO) market was pegged higher at $5.95 per ton, while the 380-cst high-sulphur (HSFO) cash premium climbed to $5.25 per ton.
However, refining margins softened day-on-day, with 380-cst HSFO cracks dipping below discounts of $5 per barrel, while VLSFO cracks fell closer towards $10 per barrel, based on LSEG data.
INVENTORY DATA
– Singapore inventories slipped 9.1% to 17.81 million barrels (2.80 million metric tons) in the week ended July 10, Enterprise Singapore data showed.
OTHER NEWS
– Oil prices gained on Thursday as crude stocks fell after U.S. refineries ramped up processing and as gasoline inventories eased, signalling stronger demand.
– Freight rates to ship Russian oil have fallen this month towards parity with those for other global exporters for the first time since 2022 as more tankers were available despite Western sanctions and exports fell, according to sources.
– India’s state-run refiners are jointly negotiating a long-term oil import deal with Russia, a government source aware of the development said on Thursday.
– U.S. refiners are making less money turning crude oil into fuels on the West Coast as the region’s gasoline inventories grow and the use of biofuels increases, data from the Energy Information Administration showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Two trades
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Tasim Zahid)