Refining margins for fuel oil posted a weekly fall in Asia after soaring the previous week, as the market had by now priced in a tighter supply outlook, while inventories at key trading hubs climbed this week.
The crack for very low sulphur fuel oil (VLSFO) closed at a premium of $13.23 a barrel on Friday, logging a weekly decline of over 17%, based on LSEG Oil Research data.
Margins rallied higher last week after operational issues emerged at Kuwait’s Al Zour refinery, while the market continued to eye ongoing developments.
Spot price benchmarks have since showed signs of easing this week, with cash differentials and margins retreating in Asia.
Singapore’s 0.5% VLSFO cash premium declined below $22 a metric ton by the end of the trading week.
On the high-sulphur front, Asia’s cash differential for the 380-cst grade remains discounted, while cracks closed at a discount of $11.93 a barrel, logging a weekly drop of about 15%.
Onshore inventories at key trading hubs of Singapore and Fujairah have climbed week-on-week, while Rotterdam stockpiles were little changed.
ARA INVENTORIES
Inventories at ARA dipped 0.4% week-on-week to 1.26 million tons in the week ended Nov. 23, latest data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Brent crude edged up on Friday as traders speculated whether the OPEC+ producer group would come to an agreement on further supply cuts.
– African members of OPEC+ producer group Angola and Nigeria are aiming for higher oil output, officials told Reuters, a day after the group was forced to postpone talks on next year’s production policy.
– Three major Greek shipping firms have stopped transporting Russian oil in recent weeks in order to avoid U.S. sanctions now being imposed on some shipping firms carrying Russian oil, four traders told Reuters and shipping data showed.
– Indonesia’s President Joko Widodo on Friday launched the construction of a carbon capture, utilisation and storage project in West Papua province operated by BP Plc, the country’s first carbon storage project.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters reported by Jeslyn Lerh and edited by Shailesh Kuber
