Asia’s 380-cst high sulphur fuel oil (HSFO) cash premiums slipped for the first time in five weeks, tracking the persistently lower offers in the trading window despite slightly positive market expectations going into December.

Cash premiums for the fuel were almost 30% lower week on week at $10.25 per metric ton, though deals were scant on Friday despite the past few sessions of deals.

The backwardation in November-December swaps retreated throughout the second half of the week, further weighing on cash premiums for all grades of fuel oil.

Meanwhile, front-month cracking margins for 380-cst HSFO were little changed week on week, hovering at a discount of around $6 a barrel.

In very-low sulphur fuel oil (VLSFO) markets, talks of some minor quota switches – around 60,000 metric tons – for one China oil major were in the market.

Cash premiums for VLSFO fell further to $8 per ton, reflecting the consistently lower-priced offers on the trading window.

The Hi-5 spread tightened back to levels last seen a week earlier at around $121 per ton, a reflection of the weaker VLSFO performance compared with continuously firm expectations of 380-cst supply-demand balance.

INVENTORIES

– Fuel oil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell back to nearly a one-month low of 1.26 million barrels in the week to Thursday, data from Dutch consultancy Insights Global showed.

REFINERY NEWS

– Cenovus’ 183,000-barrel-per-day refinery in Lima, Ohio issued a notice to the nearby community of “strong odors” as a result of an issue with one of the units at the plant, the company said in an emailed statement.

-ADNOC Logistics & Services ADNOCLS.AD signed contracts worth $4.4 billion to build 23 supertankers for ethane, ammonia and liquefied natural gas, the UAE’s state news agency reported on Thursday.

– Over 22% of crude oil production and 9% of natural gas output in the U.S. Gulf of Mexico was shut in response to Hurricane Rafael, the U.S. Bureau of Safety and Environmental Enforcement said on Thursday.

Source: Reuters reported by Trixie Yap