SINGAPORE: Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market complex edged higher on Wednesday, halting sharp declines earlier in the week that sent prices to multi-month lows in the previous session.
VLSFO cash differential improved to minus $2.50 a tonne to Singapore quotes from a 9-1/2-month low of minus $2.83 a tonne on Tuesday.
Similarly, the front-month time-spread rose to minus $2.25 a tonne on Wednesday from a 10-month low of minus $3.25 a tonne in the previous session, while the front-month crack against Dubai crude climbed to $10.02 a barrel from a five-month low of $9.63 a barrel on Tuesday.
Asia fuel oil market was hammered this week amid ample supplies and sluggish demand, trade sources said.
Meanwhile, fuel oil inventories in the Fujairah bunkering and storage hub climbed 4% to a two-week high in the week ended May 17, data released on Wednesday showed. The inventories rose despite elevated fuel oil exports from the Fujairah hub, trade sources said.
Fujairah Oil Industry Zone inventories for heavy distillates and residues rose by 535,000 barrels, or about 84,000 tonnes, to 13.05 million barrels, or 2.14 million tonnes, data via S&P Global Platts showed. In the week ended April 26, Fujairah fuel oil stocks hit an eight-month high of 15.075 million barrels, or 2.37 million tonnes.
Compared to last year, however, Fujairah’s fuel oil stocks were 17% lower.
According to assessments by Refinitiv Oil Research, exports from the UAE hit a 13-week high of 440,000 tonnes in the week ended May 16, up by 90,000 tonnes from the prior week.
Six fuel oil cargoes were loaded from the Fujairah hub, four of which were heading to Singapore totalling 250,000 tonnes and another 130,000-tonne cargo headed to Malaysia, according to Refinitiv Oil Research.
No VLSFO or high-sulphur fuel oil (HSFO) cargo trades were reported in the Singapore trading window for a third straight session.
Thailand’s Thaioil offered a 28,000 tonne 180-cst VLSFO cargo with a maximum 0.5% sulphur content loading from Sriracha over June 13 to 17 in a tender closing on May 19.
China’s newly imposed tax on $22 billion worth of annual imports of three fuels will have a wide-ranging impact on the global oil industry, hurting Venezuelan suppliers and Korean refiners as well as international and domestic merchants.
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