Singapore backwardation spread for 380-cst high sulphur fuel oil (HSFO) received a further boost on Wednesday, though market sources said the rally was largely driven by sentiment and position taking.
The 380-cst HSFO March/April spread widened above $18 per metric ton at Asia close, compared to $15.50 per ton at the previous close, data from sources showed.
Robust buying persisted for the intermonth spread, even as the market eyed steady-to-higher Russian high-sulphur supplies to Asia in subsequent months, while demand is expected to remain weak from China and India.
Meanwhile, the market for very low sulphur fuel oil (VLSFO) remained at downside risk, with refuelling demand holding soft in February so far at major bunker ports in Asia, said sources.
Delivered-basis premiums at Singapore have been weakening amid competitive selling, a trader said.
Refining cracks for fuel oil closed lower on Wednesday, with March VLSFO margin dipping to premiums of about $11 per barrel, while cracks for 380-cst HSFO (FO380BRTCKMc1) closed stable day-on-day at discounts near 65 cents a barrel.
In recent tenders, Thailand’s PTT offered HSFO for loading between March 22 and 24.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) dipped 2.1% to 10.01 million barrels (1.58 million tons) in the week to Feb. 17, showed FOIZ data published by S&P Global Commodity Insights.
OTHER NEWS
– Oil prices edged up on Wednesday amid worries of oil supply disruptions in the U.S. and Russia, and as markets awaited clarity on the Ukraine peace talks.
– Chinese refiners have stepped up purchases of Brazilian and West African crude as they reorganise sourcing around sanctions and tariff disruptions, and after prices of Middle Eastern grades surged.
– Dutch tank storage company Vopak said on Wednesday it expected its 2025 core profit to remain broadly at last year’s level, supported by strong demand for infrastructure services across most of its business areas.
– Layoffs at Lyondell Basell Industries’ shuttered Houston refinery will begin in mid-April, the company stated in a letter sent to the United Steelworkers union this week.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters