Spot premiums for fuel oil fell further on Monday, while market backwardation narrowed at the prompt months for both high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO).
Cargo trade remained broadly thin, while softer offers emerged in the spot market and pressured premiums down. Bearish feedstock demand from China and lacklustre bunker demand at Singapore have been capping cargo benchmarks in recent sessions.
Backwardation for 380-cst HSFO held onto its recent strength, staying above $15 per metric ton for the March/April contract, though showing some signs of easing. Meanwhile, the March/April backwardation for VLSFO narrowed below $5 per ton.
Refining cracks for 380-cst HSFO (FO380BRTCKMc1) reverted back to discounted territory since last week, while VLSFO cracks (LFO05SGBRTCMc1) eased towards premiums near $11.50 a barrel.
BUNKER DATA
Marine fuel sales at the United Arab Emirates’ Fujairah extended gains for a second straight month in January, but edged lower versus the same month last year, latest data showed.
The climb was led by strong sales of 380-cst high-sulphur marine fuel at the port, widening the market share of high-sulphur bunkers further to 29% in January, compared with 26% in December.
OTHER NEWS
– Oil prices were little changed on Monday as investors eyed developments on a potential Russia-Ukraine peace deal that could ease sanctions disrupting global supply flows.
– Oil exports from the semi-autonomous Kurdistan region will resume next week, Iraq’s oil minister said on Monday, resolving a near two-year dispute as ties between Baghdad and Erbil improve.
– Oil flows via the Caspian Pipeline Consortium (CPC) were reduced on Monday after a drone struck the Kropotkinskaya pumping station in Russia’s southern Krasnodar region, the CPC said in a statement.
– Brazilian state-run oil firm Petrobras has confirmed the presence of oil in a well at its offshore Buzios field, the firm said on Friday, without giving details on the size of the discover.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters