SINGAPORE: Cash premiums for cargoes of Asia’s 380-cst high-sulphur fuel oil (HSFO) jumped to a near five-month high as demand surged in the Singapore trading window on Tuesday.
The 380-cst HSFO cash premium jumped to $2.86 a tonne to Singapore quotes on Tuesday from $1.50 a tonne in the previous session and its highest since March 19.
HSFO market fundamentals have been boosted in recent weeks by tight supplies amid ongoing heavy crude oil production cuts, as well as firm residual fuel feedstock demand from refiners and utilities.
The firming 380-cst HSFO prices in Asia have helped push the front-month East-West arbitrage spread for the fuel to a more than four-month high of $14.25 a tonne on Tuesday, Refinitiv data in Eikon showed.
Six fuel oil cargoes were traded in the Singapore window on Tuesday totalling 140,000 tonnes, the highest daily volume since Jan. 5, when deal volumes hit 200,000 tonnes.
The cargo trades included five 20,000 tonne 380-cst HSFO cargoes and one 40,000-tonne 0.5% very low-sulphur fuel oil (VLSFO) cargo.
Trafigura was the sole buyer of the HSFO cargoes, lifting three from Glencore and two from PetroChina. Gunvor sold the VLSFO cargo to Vitol.
Pakistan’s PSO is seeking up to 510,000 tonnes of fuel oil imports for delivery from August through to October through multiple tenders.
Among these, PSO is seeking 250,000 tonnes of low sulphur fuel oil with a maximum 0.95% sulphur content through five 50,000-tonne cargoes, as well as 260,000 tonnes of HSFO with a maximum 3.5% sulphur content through four 65,000-tonne cargoes. Sri Lanka’s Ceypetco also issued a tender seeking 20,000 tonnes of 180-cst fuel oil with a maximum 3.5% sulphur content for delivery to Colombo over Sept. 6-7 in a tender closing on Aug. 10 with two days’ validity. Soaring liquefied natural gas prices have prompted utilities to turn to fuel oil imports for use in
power generation, contributing to the bullish sentiment in market, trade sources said.
Russian fuel oil exports from the Black Sea port of Tuapse are set to fall by 13% month on month to 390,000 tonnes in August from 450,000 tonnes scheduled for July, traders said on Tuesday, citing the loading schedule.