Asia’s spot premium for 380-cst high sulphur fuel oil (HSFO) extended declines to a one-month low on Wednesday, with offers for July parcels softening from the previous day.
The cash differential for Singapore 380-cst HSFO slipped to a premium below $2 to fuel oil cargo quotes, while cracks closed at discounts near $1 to crude oil quotes.
An amply supplied prompt market has put downward pressure on benchmarks in recent sessions, trade sources said.
The market’s prompt backwardation spread has also narrowed compared to earlier this month, as some traders were selling off to cut losses amid volatile swings in prices.
Spot differentials for very low sulphur fuel oil (VLSFO) also inched lower this week, falling below $7 over cargo quotes on Wednesday, though cracks for VLSFO firmed day-on-day at above premiums of $11 a barrel.
Separately, Vietnam’s Nghi Son offered fuel oil for loading in early July via a tender that closes on Thursday, showed a notice from its website.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) jumped 22.3% to 10.34 million barrels (1.63 million tons) in the week to June 23, FOIZ data published by S&P Global Commodity Insights showed.
OTHER NEWS
– Oil prices climbed on Wednesday as investors assessed the stability of a ceasefire between Iran and Israel, but held near multi-week lows on the prospect that crude oil flows would not be disrupted.
– U.S. President Donald Trump said on Tuesday that China can continue to purchase Iranian oil after Israel and Iran agreed to a ceasefire, a move that the White House clarified did not indicate a relaxation of U.S. sanctions.
– Exports of four key Nigerian crude oil grades will average around 864,000 barrels per day in August, preliminary programmes seen by Reuters showed, up from a planned 694,000 bpd scheduled to load in July.
– U.S. regional electric grid operators scrambled to avoid rotating blackouts on Tuesday, preserving razor-thin power generation margins as temperatures in the eastern half of the country soared past 100 degrees Fahrenheit (38 degrees Celsius).
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters