Spot cash premiums for fuel oil dipped in Asia on Thursday, while onshore stocks recovered after three weeks of declines.
The very low sulphur fuel oil (VLSFO) cash premium fell to $18.45 a metric ton, while refining crack inched lower at $10.30 a barrel.
Market backwardation eased day-on-day, with the Nov/Dec timespread narrowing to $17 a ton, compared with $18.25 a ton in the previous session.
Meanwhile, high sulphur fuel oil (HSFO) also softened, with the 380-cst cash premium sliding to $1.25 a ton, while refining crack held stable at a discount of $15.02 a barrel.
In tenders, Thailand’s PTT offered two cargoes of 380-cst HSFO for loading from Sriracha port in November.
SINGAPORE INVENTORIES
Onshore fuel oil inventories rose 7.9% to 19.39 million barrels (3.05 million metric tons) in the week to Oct. 12, hitting three-week highs, Enterprise Singapore data showed.
This came as weekly net fuel oil imports recovered by 55% to 943,000 tons, with rising imports and falling exports.
Malaysia was the top origin for net fuel oil import volumes, followed by the UAE and Estonia, while China was the top destination for net fuel oil exports as with last week.
OTHER NEWS
– Oil prices fell on Thursday as the United States eased sanctions on Venezuela to allow more oil to flow globally, but fears that Israel’s military campaign in Gaza may escalate to a regional conflict kept a lid on losses.
– A broad easing of U.S. oil sanctions on Venezuela will not quickly expand its output but could boost profits by returning some foreign companies to its oilfields and providing its crude to a wider set of cash-paying customers, experts said.
– Litasco, a trading arm of Russia’s No.2 oil producer Lukoil, said on Thursday that it had not received any offer for its refinery in Bulgaria and there were no talks to sell it, amid mounting pressure from Bulgarian authorities.
– U.S. oil refiners have cranked up output of diesel, heating oil and jet fuel for winter but are struggling to turn a profit because gasoline margins have fallen over 80% since the summer driving season ended.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shweta Agarwal)