Spot premiums for fuel oil eased in Asia on Monday, with offers retreating from the previous session, while overall trading momentum was largely thin.
Singapore’s cash premium for very low sulphur fuel oil (VLSFO) was pegged below $3 a metric ton to cargo quotes, with backwardation weakening further at the prompt months.
Meanwhile, 380-cst high sulphur fuel oil (HSFO)’s cash premium was pegged lower at $11.15 a ton on Monday, with the market showing some signs of easing after holding rangebound in recent sessions.
Reflecting the softer turn in the HSFO market, the hi-5 fuel oil spread steadied on Monday after softening recently to its narrowest premium in more than five months. The balance-month December hi-5 closed at $87.45 a ton, showed LSEG data (0830 GMT).
Total fuel oil supplies to Asia are likely to remain heavy into this month, trade sources said.
Within the region, Vietnam’s Nghi Son offered more fuel oil for December loading compared to its typical monthly volume. The refiner offered 37,000 tons of straight-run low sulphur fuel oil for loading from Dec. 16 via a tender that closes on Dec. 5.
REFINERY UPDATES
– Taiwan’s Formosa Petrochemical Corp is operating its refinery at a reduced rate of 410,000 barrels per day due to maintenance at its delayed coker unit (DCU) this month, its spokesperson KY Lin said on Monday.
OTHER NEWS
– Oil prices rose on Monday, supported by strong factory activity in China and heightened tensions in the Middle East as Israel resumed attacks on Lebanon despite a ceasefire agreement.
– Top oil exporter Saudi Arabia is expected to slash crude prices for Asian buyers in January to the lowest in years, largely tracking a slump in Middle East benchmark prices last month, traders said on Monday.
– Freight rates for Russian oil transportation are set to rise amid coming winter season and new sanctions against Russian fleet, three traders said.
– Trafigura and three other defendants, including a former board member, go on trial over the alleged payment of bribes to an Angolan oil official for oil deals in a landmark case that opens on Monday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Tasim Zahid)