Asia’s cash premium for very low sulphur fuel oil (VLSFO) extended a slide on Friday, while spot high sulphur fuel oil (HSFO) closed at narrower discounts.

VLSFO benchmarks have been under pressure due to slower bunker purchases in February, with industry sources eyeing March demand and incoming supplies from Kuwait.
The cash premium for VLSFO dropped for a third straight day to $4.65 a metric ton, while refining cracks LFO05SGDUBCMc1 eased to about $14 a barrel at the Asia close.

HSFO recovered as firmer bids emerged for the 380-cst grade, even though the market remained stuck in discounts due to bearish supply pressure.

The cash differential for 380-cst HSFO firmed to a discount of $3.48 a ton, while margins FO380DUBCKMc1 closed higher at discounts of around $12.50 a barrel.

KUWAIT EXPORTS

Kuwait’s fuel oil exports rose for a second month in February, according to shiptracking data from Kpler and LSEG, as the Al Zour refinery powered towards full capacity.
“We anticipate Al Zour’s average runs in 2024 will be around 415,000 bpd (67%), with a sweet spot ranging from 400,000 to 450,000 bpd,” said Palash Jain, FGE’s Middle East oil analyst.

Kuwait’s oil exports hit a record high of about 720,000 metric tons (158,000 barrels per day) in February, data from analytics firm Kpler showed.

INVENTORY DATA

– ARA inventories STK-FO-ARA rose 1.3% week-on-week to 1.491 million tons in the week to Feb. 29, striking a 30-month high, data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil prices rose on Friday and were heading for weekly gains, as markets awaited an OPEC+ decision on supply agreements for the second quarter while weighing fresh U.S. and Chinese economic data.

– Russia has significantly increased its fuel exports to Senegal this year on rising bunker demand, as more companies are diverting cargoes around Africa instead of using Red Sea routes, traders said and LSEG data showed.

– French container shipping giant CMA CGM expects disruptions to commercial shipping to last for months, Chairman and CEO Rodolphe Saade said.

– Global oil demand will grow by 1.9 million barrels per day this year, according to a prediction by energy research company Wood Mackenzie, a forecast close to the Organisation of the Petroleum Exporting Countries’ estimate for 2024.

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 Mrigank Dhaniwala