SINGAPORE: The 0.5% very low sulphur fuel oil market in Asia held steady on Tuesday as expectations of lower regional supplies in February limited the extent of price declines.
The front-month refining crack rose to $12.40 a barrel at the Asia close (0830 GMT), while the cash differential eased slightly to a premium of $22.20 a tonne over Singapore quotes on Tuesday.
Total fuel oil supplies to Asia are expected to surpass 4 million tonnes in February, Refinitiv ship-tracking data showed as of Tuesday, and steady to lower from January.
The slightly softer trend was led by fewer exports from regional producers in Asia, as relatively higher refining margins for gasoline prompted a switch in production away from heavy distillates. Front-month gasoline cracks have climbed above low sulphur fuel oil cracks since early December, data showed.
Meanwhile, the high sulphur fuel oil market remained under downward pressure this week amid expectations of steady arrivals from Russia and the Middle East.
The cash differential for 180-cst HSFO slid further on Tuesday to a discount of $5.92 a tonne, after slumping to eight-month lows in the previous session. The spot 380-cst HSFO market also extended declines, slipping to parity over Singapore quotes on Tuesday, with four cargoes trading at this value.
Oil prices rose on Tuesday, driven by China’s demand recovery optimism and supply shortage concerns amid the shutdown of a major export terminal after an earthquake in Turkey.
Indonesia’s state energy company Pertamina is targeting oil and gas lifting in 2023 of around 900,000 barrels of oil equivalent per day (boepd), up 5% from the previous year, chief executive Nicke Widyawati told a parliamentary hearing.
India’s proposal for a biofuels alliance to promote cleaner fuel has attracted interest from a number of countries, including Russia and Brazil, Oil Minister Hardeep Singh Puri said.
BP reported a record profit of $27.6 billion in 2022 which was lifted by a surge in energy prices since Russia’s invasion of Ukraine as the company also boosted its dividend by 10%.
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