Margins for high sulphur fuel oil (HSFO) extended declines for a second consecutive week in Asia, while very low sulphur fuel oil (VLSFO) was down for a third week, data showed on Friday.
Prompt-month 380-cst HSFO/Brent crack (FO380BRTCKMc1) closed at a discount of 9 cents a barrel, versus premiums of above $2 in the previous week, data showed. Meanwhile, HSFO/Dubai crack closed at a premium of 25 cents a barrel.
Volatile trading is expected to continue for HSFO in the coming weeks, while VLSFO is likely to be rangebound amid a lack of fresh drivers, trade sources said.
Cracks for VLSFO (LFO05SGBRTCMc1) closed at premiums of about $11 a barrel, logging a weekly fall of about 5%.
In the spot market, VLSFO continued to trade at stable premiums (MF05-SIN-DIF) on Friday, while cash differentials for 380-cst HSFO (FO380-SIN-DIF) inched up as brisk trade continued.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) fell 6.4% week-on-week to 1.08 million tons in the week to June 5, based on data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices were on track for their first weekly gain in three weeks after U.S. President Donald Trump and Chinese leader Xi Jinping resumed trade talks, raising hopes for growth and stronger demand in the world’s two largest economies.
– India’s two major private-sector refiners, which have long prioritised exports, are turning to local sales, grabbing share in the country’s fast-growing $150 billion fuel retail market as weaker global demand squeezes profit margins offshore.
– Indonesia’s Pertamina is seeking to buy up to 1.2 million barrels of term gasoline cargoes monthly for delivery between July and September, according to a document seen by Reuters on Friday, its second such tender in a month.
– Petrobras aims to make Africa its main region of development outside Brazil, the state-run oil giant’s CEO told Reuters on Thursday during a wide-ranging interview about the company’s strategy.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Five trades
– 0.5% VLSFO: One trade
Source: Reuters