Asia’s very low sulphur fuel oil (VLSFO) market softened for a fourth trading session, while onshore inventories at Singapore continued to hold above typical averages.
The cash differential for VLSFO was pegged below a premium of $6 on Thursday, with offers retreating day-on-day.
Inventories for fuel oil remained high at Singapore as net imports gained, with stockpiles climbing and maintaining above typical weekly averages of 20 million barrels for a sixth consecutive week, official data showed.
Tepid demand from the bunkering sector also limited inventory drawdowns. Spot bunker purchases have been cautious amid volatile crude prices recently, trade sources said.
Meanwhile, differentials for 380-cst high sulphur fuel oil (HSFO) rebounded on Thursday after hitting a one-month low in the previous session. Stronger bids emerged for both physical and derivative markets.
Cracks continued to post rangebound movement, based on LSEG data. HSFO cracks closed near parity to crude quotes, while VLSFO cracks held above premiums of $11 a barrel.
INVENTORY DATA
– Singapore residual fuel inventories (STKRS-SIN) rose 4.6% to 22.5 million barrels (about 3.54 million metric tons) in the week to June 25, Enterprise Singapore data showed.
OTHER NEWS
– Oil prices were steady on Thursday after erasing earlier gains as investors remained cautious about the Iran-Israel ceasefire, while also shifting focus to market fundamentals.
– Venezuela’s state-run PDVSA was on Wednesday restarting several operational units at its 310,000-barrel-per-day Cardon refinery, the country’s second largest, following a power blackout that halted the facility earlier this week, two sources said.
– Brazil’s National Energy Policy Council approved increasing the level of biofuels mixed into fossil fuels, a move celebrated by renewable energy lobbies after the government earlier this year hinted those percentages would not be changed.
– Shell has not bid for BP and is not actively considering such a move, it said on Thursday, adding it was bound by UK regulations, which mean such a statement bans it from making a bid for BP for the next six months.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Two trades
– 0.5% VLSFO: No trade
Source: Reuters