SINGAPORE: Asia’s high sulphur fuel oil (HSFO) market was little changed on Wednesday amid thin trade, while concerns of short-term supply tightness eased after Fujairah loadings resumed.
Fuel oil shipments from Fujairah are still ramping up gradually, with an estimated volume of 210,000 tonnes departing for Singapore in August so far, based on Refinitiv Oil Research.
Bunkering operations at Fujairah have also improved versus last week, according to trade sources. Some sellers were able to offer marine fuel earliest from next week, though there was still backlog to be cleared.
The 180-cst HSFO cash differential in Asia inched up 7 cents to a premium of $1.16 per tonne over Singapore quotes, while the 380-cst HSFO cash differential was stable at a premium of $6.66 per tonne.
Meanwhile, Asia’s 0.5% very low sulphur fuel oil market has also steadied following sharp declines in previous sessions. Further downside to the market could be capped as expectations of higher supply have already been priced in, sources said.
The 0.5% VLSFO cash differential dipped 68 cents to a premium of $14.95 per tonne over Singapore quotes on Wednesday. The differential has come off drastically compared to its record high of $86.23 in mid-July.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues rose 3% from the previous week to 12.85 million barrels (2.02 million tonnes) in the week ended Aug. 8, latest data from S&P Global Commodity Insights showed.
Oil prices fell on Wednesday ahead of a key US report on inflation and after industry data showed US crude inventories unexpectedly rose last week.
A tanker of US sour crude was delivered at Germany’s port of Rostock last week for the first time ever, as local refiners test alternatives to Russian oil.
India’s fuel demand in July rose 6.1% year-on-year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Cuban officials may need to scramble to set up expensive floating storage capacity to handle imports aimed at easing an acute fuel scarcity, following a fire at Cuba’s largest oil storage facility, sources and experts said.
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