Cash premiums for fuel oil were rangebound in Asia on Thursday, while latest data showed that inventories at Singapore rebounded following a sharp drawdown last week.
Onshore inventories recovered to a two-week high after hitting 5-1/2-year lows last week, although overall stockpiles remained capped as incoming supplies to Asia fell in May.
However, average weekly fuel oil inventories fell to 18.09 million barrels in May, compared to 20.80 million barrels in April and 20.97 million barrels in March, calculations based on the official data showed.
This has kept high-sulphur (HSFO) benchmarks supported, with Singapore 380-cst HSFO cash premiums holding above $10 a metric ton, while cracks were stable at discounts of $4.40 a barrel.
Meanwhile, the low-sulphur (VLSFO) market softened slightly amid a competitive spot offer for mid-June loading dates, with cash premium dipping below $4 a ton, though margins were stable at premiums of $8.40 a barrel.
INVENTORY DATA
– Singapore inventories climbed 7.7% to 16.99 million barrels (2.68 million tons) in the week ended May 29, reaching a two-week high, Enterprise Singapore data showed.
OTHER NEWS
– Oil prices eased on Thursday after resilient U.S. economic activity pointed to borrowing costs staying higher for longer in a potential blow to demand.
– Rising global oil inventories through April due to soft fuel demand may strengthen the case for OPEC+ producers to keep supply cuts in place when they meet on June 2, OPEC+ delegates and analysts say.
– Shell and Exxon Mobil are nearing an agreement to sell their jointly-owned gas fields in the southern North Sea to independent British producer Viaro Energy, three industry and banking sources said.
– Top U.S. independent oil and gas producer ConocoPhillips on Wednesday agreed to buy Marathon Oil for $22.5 billion, the latest in a series of mega-deals in the energy industry.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Varun H K)