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Asia Fuel Oil-HSFO cash premiums fall, timespreads crunch

Tuesday, 03 October 2023 | 00:00

Asia’s high sulphur fuel oil market softened on Monday, with cash premiums sliding and backwardation timespreads narrowing sharply compared to last week.

A flurry of spot offers emerged for 380-cst HSFO, but these met with no buying interest.

The cash premium for 380-cst HSFO FO380-SIN-DIF fell to $3.90 a metric ton on Monday.

Market backwardation also eased, with the October/November timespread narrowing to about $7.25 a ton at the Asia close, compared with about $12 last week.

The November crack for 380-cst HSFO FO380DUBCKMc1 slipped to a discount of $14.46 a barrel, hitting a six-month low.

HSFO remains under downward pressure as seasonal demand from the Middle East starts tapering off and importing activity from China retreated in recent months.

Meanwhile, the 0.5% very low sulphur fuel oil market firmed. Cash premium MFO05-SIN-DIF rose to $16.55 a metric ton on Monday, while November crack LFO05SGDUBCMc1 climbed to a premium of $9.08 a barrel on Monday.

In tenders, India’s Reliance offered 40,000 tons of carbon black feedstock for loading between Oct. 21 and 22. The tender closes on Monday.

OTHER NEWS

– Oil prices held steady on Monday as investors’ focus returned to a tight global supply outlook, while a last-minute deal that avoided a U.S. government shutdown restored some risk appetite.

– Turkey will restart operations this week on a crude oil pipeline from Iraq that has been suspended for about six months, Turkey’s Energy Minister Alparslan Bayraktar said on Monday.

– Pakistan refiner Cnergyico has imported the country’s first private-sector shipment of Russian crude oil, it said on Monday, as the cash-strapped nation takes advantage of Moscow’s discounts on its oil exports.

– The Singapore Exchange launched on Monday its first ammonia swap and futures contracts aimed at meeting hedging needs from the power sector as interest in the energy- transition fuel grows.

WINDOW TRADES O/AS

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shailesh Kuber)

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