Asia’s hi-5 fuel oil spread widened for a second consecutive session on Tuesday, as the very low sulphur fuel oil (VLSFO) market continued to extend its recovery.
The front-month hi-5, which reflects VLSFO’s premium over 380-cst high sulphur fuel oil (HSFO), closed at $77.50 a metric ton on Tuesday, showed data compiled by LSEG.
Cash differentials for VLSFO have recovered in recent sessions, with the product trading higher in the spot market.
In contrast, HSFO cash differentials remained in discounts to cargo quotes amid an absence of bullish drivers.
Meanwhile, cracks for VLSFO strengthened while HSFO steadied. The Singapore October VLSFO crack closed at a premium near $7 a barrel on Tuesday, while 380-cst crack remained near a discount of $5 a barrel.
BUNKER DATA
Marine fuel sales at the UAE’s Fujairah bunker hub extended gains for a second straight month in August, logging a four-month high of about 644,000 metric tons, Fujairah Oil Industry Zone data showed.
High-sulphur sales retreated while low-sulphur sales climbed. The price difference between low-sulphur fuel and high-sulphur fuel had narrowed into August, after widening sharply in July.
OTHER NEWS
– Oil prices edged up on Tuesday, extending previous session gains, as markets contemplated potential supply disruption from Russia after Ukrainian drone attacks on its refineries as well as the prospect of a U.S. central bank interest rate decision.
– Sanctioned tanker Spartan has discharged Russian crude oil at India’s Mundra port despite a ban by the Adani Group on entry of blacklisted ships at the terminal, ship tracking data from LSEG and Kpler showed on Tuesday.
– Kuwait Petroleum Corporation is seeking to revive the Shahin project to lease and re-lease crude oil pipelines, a presentation by the company showed on Tuesday.
– Italiana Petroli’s founding family has agreed to sell the oil refiner to State Oil Company of Azerbaijan (SOCAR) in a deal that will hand the group control of one of Italy’s largest petrol station networks, two sources said.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: One trade
Source: Reuters