Spot fuel oil premiums extended gains in Asia on Wednesday, backed by strength in the derivatives market where buying activity gathered pace and led to a firmer market structure, trade sources said.

The backwardation spreads for prompt trading months widened for key fuel oil grades, based on data from LSEG as well as market sources. FO380SGSDMc1, LFO05FSGSMc1

The strength in the derivatives market was largely driven by firmer buying activity from a major trading house, said sources.

Refining margins also rose day-on-day, with 380-cst high sulphur fuel oil cracks hitting discounts of about $4.50 per barrel, while very low sulphur fuel oil cracks closed higher at premiums of around $11.80 per barrel.

INVENTORY DATA

– Fujairah heavy fuel inventories FUJHD04 fell 5.9% to 9.42 million barrels (1.48 million tons) in the week to July 22, showed FOIZ data published by S&P Global Commodity Insights.

OTHER NEWS

– Oil prices traded around their lowest level in six weeks on Wednesday, as the northern hemisphere gets deeper into summer with limited signs of the expected fuel consumption surge the period usually sees. O/R

– The Russian government is considering a ban on exports of diesel due to rising domestic prices, the Kommersant daily reported on Wednesday, citing several unnamed sources.

– Ship owner Hafnia, operator of the Hafnia Nile oil tanker, is in discussion with Singapore’s Maritime and Port Authority (MPA) about transferring the damaged ship’s cargo of naphtha to a safe location, the MPA said on Wednesday.

– U.S. oil refiners are expected to report sharply lower second-quarter earnings from a year ago after a listless summer driving season that weakened refining margins, energy analysts said.

WINDOW TRADES O/AS

– 180-cst HSFO: No trade

– 380-cst HSFO: No trade

– 0.5% VLSFO: No trade

ASSESSMENTS

Source: Reuters, reported by Jeslyn Lerh and edited by Shailesh Kuber