SINGAPORE: Asia’s cash premium for very low sulphur fuel oil (VLSFO) fell to the lowest in nine months on Friday as more competitive offers emerged and traded versus the previous day.
The 0.5% VLSFO cash differential dipped 67 cents to a premium of $9.36 per tonne over Singapore quotes, sliding for seven consecutive sessions.
Singapore fuel oil inventories have risen on the week, while overall supply remains ample to meet downstream demand for bunkering.
Cash differentials for high sulphur fuel oil (HSFO) also trended softer in the week, though 180-cst HSFO cracks posted a slight climb week-on-week.
Power utility demand for fuel oil has largely held firm in the Middle East into August, in turn supporting the HSFO market.
However, the market remains awash with Russian supplies that have made their way into ship-to-ship transfer hubs like Fujairah, with some of these barrels eventually exported to Asia, based on ship-tracking data.
The 380-cst HSFO cash differential in Asia rose 28 cents day-on-day to a premium of $4.11 per tonne on Friday, but posted a weekly decline of more than 45%.
Vietnam’s Nghi Son has offered 10,000 tonnes of LSFO for loading between Sept. 7 and Sept. 9, in a tender that closes on Aug. 29.
Fuel oil inventories in the ARA refining and storage hub rose 4% to 1.27 million tonnes in the week ended Aug. 25, latest data from Dutch consultancy Insights Global showed.
Oil prices rose on Friday on signs of improving fuel demand, although further gains were capped as the market awaited clues from the US Federal Reserve chairman on the outlook for rate hikes in a speech later in the day.
PetroChina expects China’s apparent refined oil products demand to grow 1.6% in the second half of 2022 from a year ago, following an economic recovery as Beijing vowed more stimulus.
Indonesia may raise subsidised fuel prices by 30% to 40% to manage fiscal pressure from a ballooning subsidy budget, lawmakers from President Joko Widodo’s ruling coalition government told Reuters on Friday.
Cuba is using a combination of ship-to-ship transfers and floating oil storage to ease fuel scarcity and power cuts following a fire that destroyed a portion of its main oil terminal, vessel tracking data showed.
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