SINGAPORE: Cash discounts for Asia’s high sulphur fuel oil market narrowed on Friday as demand from South Asia strengthens into the peak summer months.
Pakistan has been stepping up fuel oil purchases amid growing demand from the power sector, with the country’s state-owned company PSO recently concluding buy-tenders for delivery in the first-half of July.
The company still has outstanding tenders for the back half of the month. Domestic fuel oil demand is also expected to ramp up in the Middle East for the summer months, which could cap exports out of the region and provide a floor to Asia’s prices.
Cash differentials for 180-cst HSFO were at discounts of $4.92 per tonne to Singapore quotes on Friday, narrowing from discounts of $7.19 per tonne on Thursday.
In contrast, the very low sulphur fuel oil (VLSFO) market pared gains this week after cash premiums struck record highs last week on expectations of tight arbitrage supply and blending components.
Cash differentials for 0.5% VLSFO were at premiums of $60.96 per tonne to Singapore quotes on Friday, versus $63.55 per tonne to Singapore quotes on Thursday.
The incident has had no direct impact on South Korea’s bunker fuel prices, according to market sources, although South Korea’s bunker premiums were expected to hold firm into June on tight supply for prompt delivery dates.
Oil prices slipped as fears over new COVID-19 lockdown measures in Shanghai outweighed solid demand for fuels in the United States. A strike by unionised truckers hit container traffic through South Korea’s southeastern port of Busan on Friday, taking it down to a third of the usual level.
The movement of containers through South Korea’s southeastern port of Ulsan has totally been suspended as of Friday morning due to a strike by unionised truckers. Iran expects an oil cargo confiscated by the United States off the coast of Greece to be returned in full, Tehran’s ambassador to Athens said on Thursday, following a Greek court ruling quashing the original decision to confiscate it.
Saudi Aramco has notified at least five North Asian refiners, mostly Chinese, that it will be supplying less than contracted volumes of crude oil in July.