SINGAPORE: Asia’s cash differentials for high sulphur fuel oil (HSFO) have improved slightly in recent trading sessions amid a steady-to-firmer market structure.
The market structure for 180-cst HSFO has flipped into a slight backwardation as of this week, versus a contango last week, Refinitiv data showed. Backwardation means the current value is higher than prices for later months.
Meanwhile, the market structure for 380-cst HSFO has largely retained a thin but steady backwardation since mid-June until now.
Reflecting a steady-to-firmer structure, cash differentials for HSFO have edged higher slightly in recent days, even as trading activity remained largely tepid.
The 180-cst HSFO cash differential climbed 25 cents to a premium of 35 cents per tonne to Singapore quotes on Tuesday. It was at a discount for June and into the first half of July before flipping into a slight premium. The 380-cst HSFO cash differential rose 8 cents to a discount of $2.00 per tonne on Tuesday, while ex-wharf bunker fuel differentials for the grade have been steady in single-digit premiums for most of July.
Marine fuel sales at United Arab Emirates’ Fujairah, the third largest bunkering hub in the world, fell to a four-month low in June as high bunker premiums and tight supplies capped uptake.
Total bunker sales volumes were down 13% month-on-month at 647,184 cubic metres (about 619,602 tonnes) in June, based on latest data from the Fujairah Oil Industry Zone published by industry information service S&P Global Commodity Insights.
Combined low-sulphur bunker sales in June sank 13% to 514,494 cubic meters from May, while its market share of overall bunker volumes was steady from May at 79%. Meanwhile, sales of 380-cst high-sulphur fuel oil (HSFO) fell 14% from May to 132,690 cubic meters in June, making up 21% of the overall bunker volumes.
Oil rose slightly on Tuesday, paring earlier losses and after soaring by more than $5 barrel in the previous session, amid concerns about tight supply.
Russia is seeking payment in United Arab Emirates dirhams for oil exports to some Indian customers, three sources said and a document showed, as Moscow moves away from the US dollar to insulate itself from the effects of Western sanctions.
Indonesia is “very likely” to delay the rollout of biodiesel with 35% palm oil content, known as B35, which was previously expected to start on July 20, energy ministry official Dadan Kusdiana said on Tuesday.