Cash differentials for both high-sulphur and low-sulphur fuel oil have flipped into premiums as of Thursday, a sign that sentiment has finally started to pick up for May loaders.

The market has been underpinned by high supplies and lukewarm demand since March.

High sulphur fuel oil (HSFO) differentials flipped into premiums on Thursday, the first time in more than two months, after sinking into discounts in early February.

The 180-cst cash differential was pegged at a premium of 88 cents a metric ton on Thursday, while 380-cst differential rose to 25 cents a ton.

Differentials for very low sulphur fuel oil (VLSFO) also extended gains to about $2 a ton on Thursday, after flipping from a discount into a premium on Wednesday.

Refining cracks for May VLSFO closed higher at premiums of about $12 a barrel, while 380-cst HSFO cracks climbed to discounts of about $8 to $9 a barrel.

Expectations of rising summer fuel demand in the Middle East could have improved sentiment, though inventories still retained ample levels.

INVENTORY DATA

– Singapore inventories rose 5.63% to 22.186 million barrels (3.49 million metric tons) in the week to April 17, latest data from Enterprise Singapore showed.

OTHER NEWS

– Oil prices were little changed after a 3% drop in the previous session as the market remains concerned about demand this year and on signs that a wider conflict in the key Middle East producing region could be avoided.

– Venezuela’s loss of a key U.S. license that allowed it to export oil to markets around the world and secure investment is expected to hit the volume and quality of its crude and fuel sales while prompting a flurry of requests for individual U.S deal authorizations.

– Nigerian billionaire Aliko Dangote has hired a crude oil manager as he builds a London trading office to manage crude and fuel deals for his new mega refinery near Lagos, three sources familiar with the matter said.

– A drop in the European Union’s carbon price this year could mean that a fund intended to be among the world’s biggest schemes for new green technologies will be smaller than budgeted for and potentially jeopardise some low-carbon projects in the EU.

Source: Reuters reported by Jeslyn Lerh and edited by Mrigank Dhaniwala