SINGAPORE: Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market complex was largely unchanged on Monday amid thin trade liquidity in the physical and paper markets, trade sources said.
The front-month VLSFO crack nudged 2 cents lower to $11.53 a barrel above Dubai crude, Refinitiv data in Eikon showed, as crude oil prices firmed.
The front-month VLSFO crack has been range bound over the past two weeks trading between $11 and $12 a barrel, the data showed, as supplies remained ample and demand sluggish.
Oil prices edged higher on Monday, underpinned by strong demand during the northern hemisphere summer driving season and a pause in talks to revive the Iran nuclear deal that could lead to a resumption of crude supplies from the OPEC producer.
Gunvor bought a 20,000 tonne 180-cst high-sulphur fuel oil (HSFO) cargo from Vitol at a $1.25 per tonne discount to the balance of June quotes. No VLSFO cargo trades were reported.
Vietnam’s NSRP has offered 10,000 tonnes of straight-run fuel oil with a maximum 5% sulphur content loading from Nghi Son over July 2-4 in a tender closing on June 23.
China’s fuel oil output was 3.24 million tonnes in May, down 19% from the same period last year, according to data released by the National Bureau of Statistics on Monday.
For the first five months of 2021, however, China’s fuel oil output was up 9% from the same period last year at 15.27 million tonnes, the data showed.
The Shanghai Futures Exchange (ShFE) said in a statement on Monday that it jointly launched the “China Zhoushan Low-Sulphur Fuel Oil bonded vessel supply price” with the Zhejiang International Oil and Gas Trading Centre.
The “China Zhoushan Low-Sulfur Fuel Oil bonded vessel supply price” is based on the settlement price of the exchange’s low-sulphur fuel oil futures contract, in aims of establishing a regional spot trade reference price and help increase Zhoushan’s bonded fuel oil spot price influence.
China has issued 35.24 million tonnes of crude oil import quotas to non-state refiners in a second batch of allowances for 2021, a 35% drop from the same slot last year, according to a government document seen by Reuters and two sources with knowledge of the matter.
The sharp decline comes after a recent crackdown on trading of such quotas as Beijing works to consolidate its bloated refining industry and reduce emissions.
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