Asia’s spot premium for very low sulphur fuel oil (VLSFO) was stable to higher on Wednesday after more trades at stronger premiums emerged.
The cash differential for VLSFO was pegged at a premium of $3.50 a metric ton to Singapore quotes, with three trades done at stronger premiums compared to the previous day.
However, refining margins for VLSFO eased amid volatile crude prices. The crack for May (LFO05SGBRTCMc1) fell below a premium of $9 a barrel, LSEG data showed.
Meanwhile, the spot market for high sulphur fuel oil (HSFO) was largely rangebound, though cracks retained strength amid seasonal demand drivers. Singapore 380-cst HSFO crack (FO380BRTCKMc1) closed at a premium near $1 a barrel.
Backwardation widened at prompt trading months across all key fuel oil grades, indicating a supported outlook for the short term.
FUJAIRAH DATA
– Marine fuel sales at the Fujairah port in the United Arab Emirates recovered in March, after hitting a record low in February, as per latest data. Volumes, excluding lubricants, totalled 639,811 cubic metres (about 634,000 metric tons).
– Fujairah heavy fuel inventories (FUJHD04) fell 17.2% to 11.00 million barrels (1.73 million tons) in the week to April 14, showed FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices rose 1%, reversing early losses as the market took a bullish view on China’s stance on potential trade talks with the United States, though gains were capped by continuing fears that the trade war will curb energy demand.
– China’s oil refinery throughput edged up 0.4% in March from a high base a year earlier, data showed on Wednesday, supported by production increases at small independent plants and higher operations at a new plant.
– The Mexican government has halted U.S. fuel imports sent into the country by road, as it cracks down on illegal deals, three sources familiar with the matter said on Tuesday.
– Australia’s top fuel retailer Ampol reported a 49% drop in first-quarter refining margins for its Lytton refinery in Queensland on Wednesday, citing lost production due to Cyclone Alfred and weak refining margins in Singapore — a bellwether for Asia.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Three trades
Source: Reuters