SINGAPORE: Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash differentials edged higher on Monday, climbing away from a one-week low touched on Friday.
The cash differential for VLSFO cargoes tumbled last week amid signs of improved prompt supplies but trade sources said they expected finished grade stocks of the mainstay marine fuel to remain limited over the near term.
The cash differential climbed to $11.20 a tonne to Singapore quotes, up 11 cents from the previous session.
In the paper market, the front-month time spread and front-month crack were both higher at $17 per tonne and $17.08 per barrel above Dubai crude,
Respectively, Refinitiv Eikon data showed.
Oil prices were steady on Monday, as investor bets that global supply will remain tight amid restraint by major producers were offset by a rise in Libyan output.
In the high-sulphur fuel oil (HSFO) market, cash differentials for 180-cst cargoes were also bid higher at a three-month high of $3.10 per tonne to Singapore quotes on firm utility demand and tight supply.
One VLSFO cargo and one 180-cst HSFO cargo trades were reported in the window totaling 40,000 tonnes.
Overall floating storage inventories for residual fuel in the Malacca Strait climbed to a two-week high of 2.42 million tonnes in the week ended Jan. 12, according to data intelligence firm Kpler.
The floating inventories were up by 83,000 tonnes, or 4%, from the previous week, Kpler data showed.
Floating VLSFO inventories climbed to 1.65 million tonnes in the week to Jan. 12, up by 4%, or 61,000 tonnes, from the previous week.
Floating stocks of residual fuels with unspecified sulphur content jumped 16%, or 53,000 tonnes, to 389,000 tonnes, while stocks of HSFO fell by 31,000 tonnes, or 8%, to 378,000 tonnes.
PetroChina International Singapore Pte Ltd climbed three spots to be the top marine fuel supplier in the world’s biggest ship refuelling hub in 2021, while the overall number of licensed suppliers fell by four to 41, official data showed on Monday.
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