Asia’s spot benchmarks for fuel oil remained under pressure on Friday amid ample supply and weak demand for marine bunker fuel.
The market for very low sulphur fuel oil (VLSFO) dipped into a weaker premium on Friday, while high sulphur fuel oil (HSFO) stagnated in discounts amid ample regional supplies.
Demand for marine bunker fuel has slowed since last week, with delivered bunker premiums trending lower at Singapore and retreating from a rally earlier this year, market sources said.
Bunker premiums for VLSFO dipped below $20 a metric ton by the end of this week, after holding at about $30 last week, according to data from sources.
A rebound in onshore supply inventories also capped a lid on the market, with inventories at key hubs Singapore and Rotterdam climbing this week.
Singapore cash differentials for VLSFO slipped to a premium of $6 a ton, while 380-cst HSFO softened to a discount of $3.95 a ton compared to the previous day.
Refining margins for both grades FO380DUBCKMc1, LFO05SGDUBCMc1 also posted weekly declines, based on LSEG data.
BUNKER UPDATES
– Vitol Bunkers has taken delivery of its first specialised biofuel bunker barge in Singapore, the company said Thursday.
– Singapore’s Maritime and Port Authority (MPA) has shortlisted 11 proposals to advance their design of fully electric harbour craft following a call for proposals in July last year, the MPA said Friday.
INVENTORY DATA
– ARA inventories STK-FO-ARA rose 2.1% week-on-week to 1.472 million tons in the week to Feb. 22, hitting a four-week high, data from Dutch consultancy Insights Global showed.
OTHER NEWS
– Oil prices are on track to snap a two-week winning streak after the U.S. central bank indicated interest rate cuts could be delayed by at least two more months, but indications of healthy demand and supply concerns could boost prices in the coming days.
– Iraq reopened the North refinery in Baiji on Friday after being closed for a decade, Prime Minister Mohammed Shia al-Sudani said in a statement.
– The U.S. government said on Thursday it approved a request from Midwestern governors allowing expanded sales of gasoline with higher blends of ethanol in their states, starting in 2025.
– Braya Renewable Fuels said Thursday it has begun renewable diesel production at Canada’s Come-by-Chance refinery, completing its conversion of the plant which once had an output of 135,000 barrels per day of fuels.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: One trade
Source: Reuters reported by Jeslyn Lerh and edited by Varun H K
