Asia’s hi-5 fuel oil spread reached its widest in more than five months, data showed on Friday, as high sulphur fuel oil (HSFO) continued to soften this week.

The hi-5, which reflects the premium of very low sulphur fuel oil (VLSFO) over 380-cst HSFO, closed above $85 a metric ton on Friday, showed LSEG data. (FO05-380SGMc1)

Spot differentials for HSFO continued to trade steadily in discounts, while 380-cst margins logged weekly declines of over 70%, closing at discounts near $3 a barrel. (FO380BRTCKMc1)

VLSFO also softened this week, though spot premiums held largely stable. Meanwhile, margins slipped about 10% week-on-week to premiums near $10.60 a barrel. (LFO05SGBRTCMc1)

Markets remained amply supplied, particularly for high-sulphur barrels, according to trade sources and ship-tracking data.

INVENTORY DATA

– ARA fuel oil inventories (STK-FO-ARA) rose 6.0% to 1.02 million tons in the week to July 10, based on data from Dutch consultancy Insights Global.

OTHER NEWS

– Oil rose on Friday after U.S. President Donald Trump said he would make an announcement regarding Russia, raising the prospect of more sanctions on the major oil producer, while tariff concerns and rising OPEC+ output capped gains.
– Saudi Arabia’s crude oil exports to China are set to rise to the highest in more than two years in August, five trade sources said on Friday, as the top exporter seeks to regain market share in the world’s biggest importer.
– Oil major Exxon Mobil told its trading counterparts that it will not buy the Mars crude oil grade until a zinc contamination issue is fixed, two sources familiar with the matter told Reuters on Thursday.
– The International Energy Agency on Friday raised its forecast for supply growth this year after OPEC+’s latest decision to pump more oil, while it trimmed its outlook for demand, saying that in recent months oil use has slowed down significantly.

WINDOW TRADES

– 180-cst HSFO: One trade
– 380-cst HSFO: Two trades
– 0.5% VLSFO: No trade

Source: Reuters