Asia’s very low sulphur fuel oil (VLSFO) market extended gains on Thursday, trading into a firmer premium for prompt April dates even as the market eyed bearish drivers.
Cash differential for VLSFO rose day-on-day to $3 a metric ton, recovering to more than a week’s high.
However, some trade sources pointed to bearish drivers capping benchmarks, including high inventories and potentially more incoming supplies.
In its latest tender, Nigeria’s Dangote refinery had offered more residual fuel for loading in April, sources said. Most of its cargoes have landed in Asia.
The latest cargo will comprise about 85,000 metric tons of low-sulphur straight-run fuel oil and 35,000 tons of slurry, set to load between April 17 and 19.
Prior to this, the refiner sold a cargo for loading between April 10 and 12, showed tender records.
Separately, Vietnam’s Nghi Son refinery offered fuel oil for loading between April 12 and 14, in a tender that also closes this week.
An ample broader supply pool in Asia has dragged the high sulphur fuel oil (HSFO) market into spot discounts recently, though cracks for 380-cst grade (FO380BRTCKMc1) retained some strength.
INVENTORY DATA
– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 21.17 million barrels (about 3.33 million metric tons) in the week to April 2, down 2.5% from the previous week, showed Enterprise Singapore data.
OTHER NEWS
– Oil prices fell by as much as 3% on Thursday after U.S. President Donald Trump announced sweeping new tariffs that investors worry will enflame a global trade war that will curtail economic growth and limit fuel demand.
– Kuwait temporarily cut electricity in some industrial and agricultural areas on Wednesday as demand for power surged due to hot weather, outstripping generating capacity that had been restricted by maintenance at power plants.
– Mexico lowered its estimate for average crude oil production for this year by 129,000 barrels per day (bpd), citing a “prudent approach” that takes into account the trajectory of the first months of the year.
– U.S. President Donald Trump’s new tariff plan has the ocean shipping industry on edge as he stokes a trade war destined to stanch transport demand and send companies scrambling to manage the fallout.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters