Asia’s high sulphur fuel oil (HSFO) benchmarks firmed on Thursday amid higher-priced bids, while the market also eyed potentially less exports from the Middle East.

The cash differential for 380-cst HSFO was pegged above a premium of $1.50 a metric ton to Singapore quotes, while crack spreads rose to discounts of about $8 a barrel.

Fuel oil exports from the Middle East typically decline in its summer months as the region is expected to stockpile more fuel oil for higher domestic demand for power generation.

Separately, fuel oil import demand from China rebounded in April, with imports climbing compared with February and March, based on Kpler’s ship-tracking data.

China also remained a key export destination for Singapore’s fuel oil outflows in the week, latest data from Enterprise Singapore showed.

Fuel oil onshore inventories dropped to a 20-week low in Singapore, led by a decline in total net imports.

INVENTORY DATA

– Singapore inventories fell 14.6% to 18.94 million barrels (2.98 million metric tons) in the week to April 24, Enterprise Singapore data showed.

OTHER NEWS

– Oil steadied on Thursday as signs of retreating fuel demand in the United States, the world’s biggest oil user, contended with widening conflict risks in the Middle East.

– Chinese state energy giant Sinopec is pushing for greater access to Sri Lanka’s market, where rival India is also seeking to expand its presence, as it looks to build its first fully controlled overseas refinery, reflecting a change in the firm’s global strategy to compensate for slowing demand growth at home.

– Russia and its partners inside the Eurasian Economic Union have agreed to continue high-sulphur bunker fuel usage and production for vessels inside the bloc until the end of 2026, the Eurasian Economic Commission (EEC) said on its website.

– Demand for liquefied natural gas to power ships will rise this year on attractive prices, while more dual-fuel vessels join the global fleet, industry executives said.

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