SINGAPORE: Asia’s high sulphur fuel oil (HSFO) market firmed on Wednesday as strong bids emerged on the first day of a new trading month, while the very low sulphur fuel oil (VLSFO) market continued to retain downward pressure amid soft demand.
The spot 180-cst cash differential edged higher at $3.11 a tonne over Singapore quotes, with two trades emerging.
There has been market talk of tighter supplies of viscosity cutter stocks, leading to a stable-to-firmer 180-cst HSFO market despite heavy HSFO arrivals for the broader market.
In contrast, the 0.5% VLSFO market continued to be underpinned by downward pressure amid tepid bunkering demand and aggressive selling.
The 0.5% VLSFO cash differential dipped to $4.95 a tonne on Wednesday, with bunker fuel premiums set for a bumpy recovery in March in Singapore as refuelling demand from the shipping sector softened sharply in recent weeks, trade sources said.
Latest spot deals on a delivered basis were between $10 and $13 a tonne over Singapore quotes, according to traders. The delivered/ex-wharf spread has narrowed recently, even flipping to a negative spread in some instances, sources said.
Residual fuel oil stocks at Fujairah climbed 7% to 13.20 million barrels (2.08 million tonnes) in the week ended Feb. 27, extending gains from the previous week’s surge, showed Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.
Russian fuel oil barrels continued to flood the trading and blending hub of Fujairah, trade sources said.
Commodities pricing agency S&P Global Platts will be excluding Russian-origin material from its assessments of fuel oil cargoes and bunker fuel in Asia and the Middle East from March 1, the company said in a note to subscribers on Wednesday.
“The majority of feedback that Platts received suggested that Russian-origin material was no longer merchantable in the open-origin Asian fuel oil and bunker markets and supported its exclusion from the relevant Platts assessments,” the company said.
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