SINGAPORE: Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market edged higher on Thursday amid muted trade, trade sources said. Despite absent deal activity, the VLSFO cash differential edged 6 cents higher to a discount of 2 cents per tonne, the narrowest discount since the start of May.
Similarly, the front-month VLSFO time spread and crack edged higher to a 50 cents per tonne backwardation and $11.82 a barrel above Dubai crude, respectively, Refinitiv data in Eikon showed. Singapore residual fuel oil inventories dropped 11% in the week to June 16, snapping two straight weeks of gains as net import volumes nearly halved, official data showed on Thursday.
Onshore fuel oil stocks fell by 2.94 million barrels, or about 463,000 tonnes, to a three-week low of 23.98 million barrels, or 3.78 million tonnes, Enterprise Singapore data showed. Compared with the same period a year earlier, the residual fuel stocks were 10% lower but were slightly above the 2021 weekly average of 23.24 million barrels.
Singapore net imports of fuel oil were down 47% in the week to Wednesday at a three-week low of 497,000 tonnes, well below the 2021 weekly average of 747,000 tonnes. Weekly figures, however, are volatile. The largest net imports were from Iraq at 120,000 tonnes, followed by Malaysia at 113,000 tonnes, Denmark at 107,000 tonnes, a five-month high, and India at a three-month high of 85,000 tonnes.
Singapore residual fuel imports from South Korea were at a more than 13-month high of 40,000 tonnes in the week to Wednesday. China recently imposed hefty taxes on imports of fuels, including light cycle oil (LCO) and diluted bitumen from June 12, curbing imports of those fuels into China. South Korea was China’s top LCO supplier.
Singapore’s top fuel oil net exports destinations were China at 89,000 tonnes, the most in nearly five months, followed by Bangladesh at 86,000 tonnes and South Africa at 36,000 tonnes.
Fuel oil flows into East Asia, most of which come to Singapore, were assessed at between 5 million tonnes and 5.5 million tonnes in June, steady-to-higher from the 5.11 million tonnes in May and firmly higher from the 2020 monthly average of 4.82 million tonnes, assessments by Refinitiv Oil Research on Tuesday showed.
No VLSFO or high-sulphur fuel oil (HSFO) cargo trades were reported in the Singapore trading window.
China is reshaping global shipping fuel markets by taking advantage of its booming maritime trade and massive refining capacity to undercut rivals from Singapore to South Korea and become the world’s fastest-growing major marine fuel hub.
Comments are closed.