Spot discounts for high sulphur fuel oil (HSFO) narrowed slightly on Friday, while very low sulphur fuel oil (VLSFO) retained downside risk.

Singapore’s cash differential for 380-cst HSFO was pegged at a narrower discount of $1.85 a metric ton, with inter-month spreads recovering slightly.

Meanwhile, spot VLSFO differentials remained below discounts of $1 a metric ton, with the market structure inching closer towards a contango for the prompt months.

The broader market remains underpinned by abundant supplies. Refining cracks for VLSFO LFO05SGDUBCMc1 held near premiums of $10 a barrel at 0830 GMT, while 380-cst HSFO cracks FO380DUBCKMc1 closed at discounts of about $11.50 a barrel.

INVENTORY DATA

– Fujairah heavy fuel inventories FUJHD04 fell 6.7% to 8.72 million barrels (1.37 million tons) in the week to April 8, hitting seven-week lows, FOIZ data published by S&P Global Commodity Insights showed.

– Singapore inventories STKRS-SIN dipped 0.4% to 21 million barrels (3.47 million metric tons) in the week to April 10, the latest data from Enterprise Singapore showed, falling for the third week in a row.

– ARA inventories STK-FO-ARA held stable at 1.4 million tons in the week to April 11, data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil prices rose on Friday as heightened tensions in the Middle East raised the risk of supply disruptions from the oil-producing region, though prices are set for weekly losses amid expectations of fewer U.S. interest rate cuts this year.

– OPEC predicted robust fuel use in the summer months on Thursday and stuck to its forecast for relatively strong growth in global oil demand in 2024, highlighting an unusually large gap between predictions of oil demand strength.

– The United Arab Emirates’ state-owned oil company recently considered buying Britain’s BP but the deliberations did not progress beyond preliminary discussions, people familiar with the matter told Reuters.

– Russian missiles and drones destroyed a large electricity plant near Kyiv and hit power facilities in several regions of Ukraine on Thursday, officials said, ramping up pressure on the embattled energy system as Kyiv runs low on air defences.

WINDOW TRADES O/AS

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade

Source: Reuters reported by Jeslyn Lerh and edited by Sohini Goswami