SINGAPORE: Asia's 180-cst high-sulphur fuel oil (HSFO) market kicked off the week higher on Monday, extending recent gains as firm demand and tightening supply continue to fuel bullish sentiment.
The 180-0cst HSFO cash premium climbed to a one-week high of $14.13 a tonne to Singapore quotes while the prompt month time spread rose to $18.50 a tonne, its highest since Jan. 29, Refinitiv data in Eikon showed.
The 0.5% very low-sulphur fuel oil (VLSFO) market was also firmer, buoyed by a tight near-term supply outlook amid limited regional exports and lacking cutter stocks. The VLSFO cash premium, prompt-month time spread and front-month crack were all higher on Monday.
Overall floating storage inventories for residual fuel in the Malacca Strait climbed to a two-week high in the week ended Sept. 1, as rising stockpiles of IMO-compliant VLSFO and other uncategorized grades offset a drop in HSFO stocks, according to data intelligence firm Kpler.
Total floating storage inventories rose by 118,000 tonnes, or 4% higher from the previous week, to 3.88 million tonnes.
This came as floating inventories of VLSFO rose 5%, or 122,000 tonnes, in the week to Aug. 18 to 2.48 million tonnes.
HSFO floating stocks were down 7%, or 31,000 tonnes, compared with the previous week at 386,000 tonnes, while stocks of residual fuels with unspecified sulphur contents fell 17%, or 102,000 tonnes, to 490,000 tonnes.
Gunvor bought three 20,000-tonne cargoes of VLSFO, lifting one each from Lukoil, Trafigura and Chevron. Vitol bought two 180-cst HSFO cargoes totalling 45,000 tonnes PetroChina and Glencore.
Saudi Arabia, the world's top oil exporter, slashed prices of all crude grades to Asian customers in October versus September, but left prices to northwestern Europe and the United States steady.
State oil giant Saudi Aramco lowered for the first time in four months the official selling price (OSP) of Arab Light crude for delivery to Asia in October to a premium of $1.70 per barrel versus the average of DME Oman and Platts Dubai crudes, according to a company pricing document. The price differential in September was a premium of $3 per barrel, the highest since February 2020.
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