Asia’s high sulphur fuel oil (HSFO) firmed slightly this week, while benchmarks for very low sulphur fuel oil (VLSFO) remained capped as of Wednesday amid ample supplies in the region.
Intermonth backwardation spreads for HSFO widened for both 180-cst and 380-cst grades from the previous session, an indication that prompt supply remained broadly tight.
Refining cracks were little changed at discounts of about $6 a barrel.
VLSFO benchmarks held largely steady on Wednesday, though the market remains at risk of downside due to ample supplies, trade sources said.
The market is eyeing more blendstocks to the Asia hub, as Singapore will receive this week its first low-sulphur straight-run fuel oil (LSSR) cargo exported from Nigeria’s new Dangote refinery.
The refinery has been exporting more LSSR since March, with most of these cargoes landing in America and Europe, though some cargoes are now on the way to Asia due to a much weaker market in Europe.
Meanwhile, cracks for VLSFO remained shaky, though they held above $8 a barrel due to broader weakness in the refining complex led by a recent collapse in the gasoline market, sources said.
INVENTORY DATA
– Fujairah heavy fuel inventories fell 5.9% to 10.07 million barrels (1.59 million metric tons) in the week to June 10, FOIZ data published by S&P Global Commodity Insights showed Wednesday.
OTHER NEWS
– Oil prices ticked higher on Wednesday after three key forecasters predicted that global oil inventories would fall in the second half of 2024. O/R
– Global crude oil and oil products shipments taking the long route between Asia, the Middle East and the West is up 47% since attacks began on vessels using the shorter Red Sea route, the Energy Information Administration said.
– Indian Oil Minister Hardeep Singh Puri announced that state-run Bharat Petroleum Corp plans to build a new refinery and the nation is looking at signing more oil import deals with countries including Russia at discounted rates.
– Two Texas men convicted by a U.S. jury in November of trying to sell Iranian petroleum in violation of sanctions imposed by Washington and of conspiracy to commit money laundering were sentenced on Tuesday to 45 months in prison, the Justice Department said.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Varun H K)