Singapore’s high-sulphur fuel oil (HSFO) margin flipped from a discount to premium on Friday, extending gains from the previous day after the U.S. imposed more sanctions on Iran.
Singapore’s March 380-cst HSFO/Brent crack (FO380BRTCKMc1) closed at a premium of 53 cents a barrel on Friday, holding onto more than five-year highs, LSEG data showed. The crack was last at a premium in Sept. 2019.
HSFO has received a boost amid tighter scrutiny on cargo movements from exporters Russia and Iran, while a tighter sour crude market also supported sentiment.
In the spot market, trading activity was largely thin on Friday, with spot premiums little changed.
The 380-cst HSFO cash premium held below $7 a metric ton at the end of the trading week, while the cash premium for very low sulphur fuel oil (VLSFO) steadied at about $5.50 a ton,
Cracks for VLSFO also inched higher, closing at premiums near $11.50 a barrel. (LFO05SGBRTCMc1)
In downstream refuelling, spot demand for marine has been slow in the week, with no uptick for bunker premiums, trade sources said.
Singapore bunker premiums for VLSFO have been rangebound in recent weeks, capped at levels near $15 a metric ton to cargo quotes for February delivery dates, based on data from sources.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) fell 4.7% at 1.33 million tons in the week to Feb. 6, based on data from Dutch consultancy Insights Global.
OTHER NEWS
– Oil prices rose on Friday but were on track for a third straight week of decline, hurt by U.S. President Donald Trump’s renewed trade war on China and threats of tariff hikes on other countries.
– Freight rates for ESPO Blend crude shipped from the Russian port of Kozmino to China have fallen 50% in early February from mid-January levels, traders said.
– BP plans to sell its BP Gelsenkirchen refining site in Germany, it announced on Thursday, as CEO Murray Auchincloss pushes on with plans to cut costs by at least $2 billion.
– Egypt has signed deals worth around $3 billion with Shell and TotalEnergies to secure 60 cargoes of liquefied natural gas to cover demand for 2025, three trading sources told Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters