Asia Fuel Oil-Spot premiums extend gains while market structure firms

July 26, 2024

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

FUEL OIL
CASH ($/T) ASIA CLOSE CHANGE PREV CLOSE RIC
Cargo – 0.5% VLSFO 587.40 -4.86 592.26 MFO05-SIN
Diff – 0.5% VLSFO 6.95 0.40 6.55 MFO05-SIN-DIF
Cargo – 180cst 491.25 -2.22 493.47 FO180-SIN
Diff – 180cst 7.35 0.55 6.80 FO180-SIN-DIF
Cargo – 380cst 485.95 -2.27 488.22 FO380-SIN
Diff – 380cst 8.75 1.60 7.15 FO380-SIN-DIF
Bunker (Ex-wharf) Premium – 380cst 9.00 1.00 8.00
Bunker (Ex-wharf) Premium – 0.5% VLSFO 8.00 0.00 8.00
For a list of derivatives prices, including margins, please double click the RICs below.
Brent M1 BRENTSGMc1
180cst M1 FO180SGSWMc1
180cst M1/M2 FO180SGSDMc1
180cst M2 FO180SGSWMc2
Visco M1 FOVISSGDFMc1
Visco M2 FOVISSGDFMc2
380cst M1 FO380SGSWMc1
380cst M1/M2 FO380SGSDMc1
380cst M2 FO380SGSWMc2
Cracks 180-Dubai M1 FO180SGCKMc1
Cracks 180-Dubai M2 FO180SGCKMc2
East-West M1 FOSGEWMc1
East-West M2 FOSGEWMc2
Barges M1 HFOFARAAMc1
Barges M1/M2 HFOFARAASMc1
Barges M2 HFOFARAAMc2
Crack Barges-Brent M1 HFOFARAACMc1
Crack Barges-Brent M2 HFOFARAACMc2

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

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