Asia’s fuel oil markets began the week with slow trading momentum, with traders remaining cautious on forward demand-supply fundamentals and the impact of China’s buying activity would pan out.

A buy-sell gap continued to hinder window trading activity, with the market barren of deals for the fourth consecutive session.

There were talks of some changes in China’s import tax policies and naming convention of fuel oil in its import classification system starting next year. Some traders expect that it may weigh slightly on China buying given that feedstock costs for processing refined fuels will likely indirectly be affected.

Cash premiums for 380-cst high sulphur fuel oil gained to above $5 a ton, as China-based bidders were aggressive on the open trading window, though a lack of cheap offers were scant in the market.

For very-low sulphur fuel oil, premiums continued to slip to around $1.7 a ton reflecting the narrower backwardated swap prices structure.

The market’s hi-5 spread (FO05-380SGMc1) was little changed at around $94 per metric ton.

INVENTORIES

– Refined oil product stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by nearly 3% on the week to their highest since May 2023, data from Dutch consultancy Insights Global showed.

– U.S. crude stocks drew down more than expected on strong refinery runs, while distillate inventories fell thanks to higher truck traffic during the holiday season and cold weather, data from the Energy Information Administration showed on Friday.

REFINERY NEWS

– BP’s BP.L 435,000-barrel-per-day (bpd) Whiting, Indiana, refinery was operating normally following a leak from a pipeline that transports liquid material, the company said.

OTHER NEWS

– China has issued at least 152.49 million metric tons of crude oil import quotas to independent refiners in a second batch for 2025 so far, several trade sources said on Monday.

– Oil prices edged down on Monday in thin holiday trade ahead of the year-end as traders awaited more Chinese and U.S. economic data later this week to assess growth in the world’s two largest oil consumers.

– State-run Indian refiner Bharat Petroleum Corp BPCL is buying Middle Eastern crude to make up for less supply of cheaper Russian oil, its head of finance Vetsa Ramakrishna Gupta said in a recent interview.

WINDOW TRADES

– 180-cst HSFO: No deal
– 380-cst HSFO: No deal
– 0.5% VLSFO: No deal

Source: Reuters