Spot premiums for high sulphur fuel oil (HSFO) retreated further on Tuesday, while more supplies continued to be eyed for the near term.
Total fuel oil arrivals in Asia are expected to breach 7 million tons this month, up from about 4.5 million tons to 5 million tons last month, calculations based on ship-tracking data showed.
The influx was led by an uptick in arrivals across all key supplying regions.
Cash premium for 380-cst HSFO extended declines in recent sessions as offers softened for April loading dates. The market has retained strength largely for the March trading cycle, despite more supplies expected.
Demand has also been soft for the product, with purchases slowing from the Chinese refining sector, while demand from the Asia bunkering sector has also been largely tepid.
Meanwhile, the market for very low sulphur fuel oil (VLSFO) held largely unchanged amid limited fresh drivers, with spot differentials holding in discounts.
VLSFO cracks for April (LFO05SGBRTCMc1) closed near $7.60 a barrel, down from the previous day, while 380-cst HSFO cracks closed at discounts near $2.45 a barrel.
In tenders, India’s HPCL offered HSFO for loading in April.
REFINERY UPDATES
U.S. oil refiners are expected to have about 1.1 million barrels per day of capacity offline in the week ending March 21, decreasing available refining capacity by 409,000 bpd, research company IIR Energy said on Monday.
OTHER NEWS
– Oil prices rose more than 1% on Tuesday to their highest levels since the beginning of the month, supported by instability in the Middle East and China’s plans for more economic stimulus.
– A ship carrying Russian crude transferred from three smaller tankers that are under U.S. sanctions unloaded last week at a Chinese port, shiptracking data shows, ending an unusual month-long voyage highlighting the efforts of producers and traders to keep Moscow’s oil flowing despite tightened curbs.
– Venezuela’s state-run PDVSA has put together three operational scenarios as part of a plan to continue producing and exporting oil at its largest joint venture with Chevron once a license for the U.S. major to operate in the country expires next month, according to a company document seen by Reuters on Monday.
– Only one tank filled with jet fuel was damaged after the U.S. military-contracted tanker that was transporting a shipment was struck by a cargo ship off England’s northeast coast, U.S. logistics firm Crowley said.
Source: Reuters