SINGAPORE: Asia’s cash premium for very low sulphur fuel oil (VLSFO) fell on Thursday, as selling interest resumed after a short-lived rebound.
The spot 0.5% VLSFO premium fell to $2.50 a tonne, while the front-month crack closed lower at $7.77 a barrel at the Asia close (0830 GMT).
VLSFO had rebounded slightly in previous trading sessions on market talk of less supplies from Kuwait’s Al Zour refinery.
The Al Zour refinery has been partially shut down due to technical issues, a spokesperson for Kuwait Integrated Petroleum Industries Company (KIPIC) said this week. The company added in a tweet that efforts were underway to gradually restore operations within two weeks. But the imminent situation was not clear, trade sources said. The last Al Zour VLSFO offer tender was sighted in the market three weeks ago. The company typically issues one tender every one to two weeks. Residual fuel oil stocks at key trading hub Singapore eased after striking more than a year’s high last week, with net imports sliding for a third consecutive week, official data showed on Thursday.
Onshore fuel oil stocks were at 23.52 million barrels (3.7 million tonnes) in the week to April 12, dipping 1% from the previous week, based on Enterprise Singapore.
However, supplies are still high compared with the start of the year when weekly inventories were about 21 million barrels.
Oil prices were stable on Thursday as the market weighed the prospect of tight supply against possible recession in the United States, the world’s largest oil consumer.
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