A recent rally in high sulphur fuel oil (HSFO) showed signs of pausing as of Thursday, while landed inventories at key trading hub Singapore rose for a second straight week.

The cash differential for 380-cst HSFO dipped slightly at $28.85 a metric ton, as front-month backwardation narrowed after firming sharply in the past few sessions.

A flurry of spot cargo bids continued to emerge as with the previous day, though trade quietened down.

The front-month crack for 380-cst HSFO also retreated, closing at a discount of $6.20 a barrel.

Meanwhile, the very-low sulphur fuel oil (VLSFO) spot market remained trapped in thin premiums.

The 0.5% VLSFO cash differential MFO05-SIN-DIF dropped to a premium of $2.99 a metric ton, while front-month crack climbed slightly to a premium of $10.69 a barrel.

In tenders, India’s MRPL offered both marine LSFO and HSFO for loading in August, each of 20,000 tons. The tender closes on Friday.

SINGAPORE INVENTORIES O/SING1

Residual fuel oil stocks at Singapore extended higher to 14-week highs as weekly exports crunched sharply, official data showed on Thursday.

Onshore fuel oil stocks climbed 10% to 22.92 million barrels (3.61 million metric tons) in the week to August 3, data from Enterprise Singapore showed.

Weekly fuel oil exports out of Singapore fell by nearly 74% as China’s spree for HSFO appears to have eased amid a sharp rally in high-sulphur fuel oil prices, trade sources said.

OTHER NEWS

– Oil slid further on Thursday as a U.S. government credit downgrade weighed on sentiment, while concerns around supply tightness provided support.

– Phillips 66 reported a 46% fall in second-quarter profit on Wednesday, the latest U.S. refiner to signal the hit from a decline in margins from last year’s sky-high levels when Russia’s invasion of Ukraine squeezed fuel supplies.

– Marine fuel consumption in Russia is set to rise by 20% in 2023 to 7.4-7.5 million tonnes, the head of Gazprom Neft’s bunkering subsidiary said.

– Belgian oil tanker and storage operator Euronav on Thursday reported stronger than expected second quarter results, driven by high freight rates.

Source: Reuters reporting by Jeslyn Lerh and edited by Varun HK