Asia high sulphur fuel oil (HSFO) benchmarks posted weekly declines as of Friday, while the market continued to watch loadings from the key exporting region of Middle East.
So far, fuel oil loadings from the Middle East appeared rangebound week-on-week, totalling more than 1 million tons, based on ship-tracking data from Kpler.
Meanwhile, supplies remained adequate in Asia for prompt dates. This has dragged the Singapore 380-cst cash premiums down towards $3 a metric ton by the end of the week.
While onshore inventories for fuel oil have retreated, the levels remained above typical weekly averages, storage data from Enterprise Singapore showed.
Margins for HSFO also weakened, closing at about parity to discounts from crude quotes, versus premiums last week, based on data from LSEG.
Cracks for very low sulphur fuel oil (VLSFO) remained little changed at about $10 a barrel over crude quotes.
The weaker HSFO performance this week has widened the hi-5 spread. The hi-5, which captures the premium of VLSFO over 380-HSFO, ended the Friday session at about $66 a metric ton, up for three days.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) fell 2% week-on-week to 1.044 million tons in the week to June 19, based on data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices fell on Friday after the White House delayed a decision on U.S. involvement in the Israel-Iran conflict, but remained on course for a third consecutive weekly rise.
– Iran is maintaining crude oil supply by loading tankers one at a time and moving floating oil storage much closer to China, two vessel tracking firms told Reuters, as the country seeks to keep a key source of revenue while under attack from Israel.
– Russia increased seaborne fuel oil and vacuum gasoil exports to India and Turkey in May as falling oil product prices attracted buyers, while the hot summer season required more fuel for energy production, trade and shipping data showed.
– China’s fuel oil imports fell in May to their lowest monthly volumes so far this year, while bunker exports also plummeted, customs data showed on Friday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Three trades
– 0.5% VLSFO: Two trades
Source: Reuters