Fuel oil cracks pared strength on Wednesday after a recent rally, while spot trade remained largely thin in the week.

Singapore 380-cst high sulphur fuel oil (HSFO) Brent-crack dipped towards premiums of 40 cents a barrel after hitting its recent high of over 80 cents the previous day.

Meanwhile, cracks for very low sulphur fuel oil (VLSFO) held steady at premiums near $12 a barrel.

Backwardation for HSFO retained support. Spot trade was largely thin, with premiums hovering above a floor amid the strength in market structure.

Some factors capped gains in the market, including bearish demand for feedstock imports from China, as well as the lack of clear supply disruption, market sources said.

FUJAIRAH DATA

– Fujairah heavy fuel inventories jumped 25.5% to 10.23 million barrels (1.61 million tons) in the week to Feb. 10, breaching eight-month highs, showed FOIZ data published by S&P Global Commodity Insights.

OTHER NEWS

– Oil prices lost ground on Wednesday after sources said industry data would show an increase in U.S. crude stockpiles, but stronger refining margins limited losses.

– The amount of Russian and Iranian oil held on ships has hit multi-month highs as harsher U.S. sanctions reduced the number of buyers, leaving fewer tankers available to deliver cargoes and driving up crude costs, trade sources and analysts said.

– India’s Bharat Petroleum Corp will sign a contract with Brazil’s Petrobras for optional crude imports of 6 million barrels in 2025-26, Chairman G Krishnakumar said on Wednesday at the India Energy Week conference.

– European prices of liquefied natural gas, which are currently trading at a premium to Asia, are reaching levels that will start hurting demand, the chief executive of global energy and commodities trading firm Vitol said on Wednesday.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters