Asia’s very low sulphur fuel oil (VLSFO) market softened on Thursday amid expectations of more incoming supplies, while Kuwait’s Al Zour is set to close its latest tender.
The refinery had offered 100,000 tonnes of 0.5% VLSFO for loading between March 24 and 25, in a tender that closes later Thursday.
Most of Al Zour’s VLSFO cargoes are expected to land in Asia, with some landing in Singapore before being channelled elsewhere regionally, trade sources said.
The broader fuel oil market in Asia remains well-supplied for now, with net fuel oil imports climbing at key trading hub Singapore over the latest week.
Net fuel oil imports rose 30% to 652,000 tonnes in the week to March 8, official data showed, with biggest volumes arriving from Saudi Arabia at 151,000 tonnes, followed by Brazil at 149,000 tonnes and the Netherlands at 138,000 tonnes.
Reflecting an amply supplied market, cash differentials for fuel oil remained stuck in single-digit premiums in recent trading sessions.
The cash differential for 0.5% VLSFO fell to $4.40 a tonne to Singapore quotes on Thursday.
SINGAPORE INVENTORIES
Onshore fuel oil stocks fell 2% to 20.17 million barrels (3.18 million tonnes) in the week ended March 8, Enterprise Singapore data showed.
OTHER NEWS
– Oil fell for a third day on Thursday as fears over the economic impact of rising interest rates offset a surprise drop in U.S. crude inventories and hopes for Chinese demand.
– India’s power ministry on Thursday said it has taken several steps to ensure adequate power availability during the upcoming summer months, in an attempt to allay fears of power cuts due to surging demand in the country.
– Barclays cut its 2023 oil price forecasts, due in part to more resilient output from Russia than expected, and said the market could flip into a deficit in the second half of the year due to growing demand in China.
– Train and air traffic will again be disrupted in France on Thursday and garbage collection in cities including Paris will be patchy as strikes against a planned pension reform are set to enter a third consecutive day.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Three trades
– 0.5% VLSFO: No trade
Source: Reuters