The cash differential for 380-cst high sulphur fuel oil flipped from a discount to a premium on Thursday, while the market eyed the potential impact on Russian fuel oil loadings amid an ongoing storm in the Black Sea.
A severe storm in the Black Sea region has disrupted up to 2 million barrels per day (bpd) of oil exports from Kazakhstan and Russia, according to state officials and port agent data.
Russia’s ministry of transport said on Thursday that restrictions on navigation at key Black Sea ports remain in place due to adverse weather.
Russian supply arrivals at the greater Singapore region have firmed by 1.9% to 1.34 million metric tons in November, based on LSEG Oil Research. It was unclear if the weather conditions will limit loadings into December.
Meanwhile, Asia’s HSFO market extended a rebound due to expected recovery in China’s purchases. The cash differential for 380-cst HSFO FO380-SIN-DIF flipped from a discount to a premium of 70 cents a metric ton.
HSFO cracks FO380DUBCKMc1 fell to discounts of $11.05 a barrel, as crude prices firmed ahead of a closely watched OPEC+ meeting on Thursday.
On the low-sulphur front, the spot market steadied after a recent decline to two-month lows. Cash premiums MFO05-SIN-DIF for 0.5% very low sulphur fuel oil climbed to $12.59 a ton on Thursday, while cracks LFO05SGDUBCMc1 were higher at premiums of $11.43 a barrel.
Meanwhile, Vietnam’s Nghi Son offered fuel oil for December loading in a tender that closes on Dec. 4, while Taiwan’s Formosa sold another 40,000 tons of LSFO for December loading.
SINGAPORE INVENTORIES O/SING1
Residual fuel oil inventories in Singapore fell to two-week lows, data showed Thursday, as a backwardated market continues to discourage storage economics.
Onshore fuel oil stocks STKRS-SIN dipped 3.1% to 19.50 million barrels (3.07 million metric tons) in the week to Nov. 29, the latest data from Enterprise Singapore showed.
OTHER NEWS
– Oil was little changed on Thursday as investors remained cautious ahead of expected production cuts by the OPEC+ group and as weaker-than-expected Chinese factory data underscored slowing growth in the world’s second largest economy.
– Taiwan’s Formosa Petrochemical Corp is planning to shut two of its three crude distillation units and some downstream units at its Mailiao refinery for maintenance in the first and third quarters of next year, the company spokesperson said on Thursday.
– Malaysia’s state energy firm Petronas reported lower third-quarter profit on Wednesday, and said it expects profitability to be squeezed by volatile oil and gas prices.
– Elliott Investment Management has taken a $1 billion stake in Phillips 66 and is urging the U.S. oil refiner and pipeline operator to revamp its board to boost lagging performance.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters reported by Jeslyn Lerh and edited by Sonia Cheema
