Asia’s fuel oil markets started the first trading day of 2024 on a stronger note, with backwardation firming from last week.

Prompt intermonth spreads for all key fuel oil grades widened from the previous week, data from trade sources showed.

Some competitive bids also emerged on the high-sulphur spot market, in turn buoying cash premiums of both 180cst and 380cst grades.

Meanwhile, cash premiums for very low sulphur fuel oil softened slightly as the product traded lower.

Trade sources continued to eye Red Sea shipping tensions, though there was no significant impact on the broader fuel oil market as yet.

Refining margins for fuel oil were little changed on Tuesday. February VLSFO cracks remained stable at premiums of about $12 a barrel, while HSFO cracks held steady at discounts of about $11 a barrel.

CHINA QUOTAS

China has released 179.01 million metric tons of crude import quotas for 2024, according to Chinese industry consultancies and trade sources on Tuesday, 60% more than the previous year.

China has issued its first refined fuel export quotas for 2024 totalling 19 million metric tons, a volume unchanged from last year’s and largely in line with market expectations, Chinese consultancies and multiple trading sources said.

OTHER NEWS

– Oil prices gained in the first session of the New Year, due to potential supply disruptions in the Middle East after a naval clash in the Red Sea and hopes of strong holiday demand and an economic stimulus in China.

– International oil prices are likely to stay near $80 a barrel in 2024, a Reuters poll showed, as analysts predicted weak global growth would cap demand, while geopolitical tensions could provide support.

– Russian oil product exports from the Black Sea port of Tuapse in January are set to fall by 26.1% month on month to 1.086 million metric tons from 1.469 million metric tons scheduled for December, two traders said.

– Rongsheng Petrochemical said on Tuesday it and Saudi Aramco are in talks for the Chinese company to buy a 50% stake in the Saudi firm’s refining unit SASREF.

Source: Reuters reported by Jeslyn Lerh edited by Shilpi Majumdar