SINGAPORE: Cash differentials for fuel oil held steady in Asia amid thin trade on Friday, while onshore inventories climbed at key trading and storage hubs this week.
The spot 0.5% very-low sulphur fuel oil (VLSFO) cash differential closed at a premium of $14.44 a metric ton over Singapore quotes, while front-month refining crack was at a premium of $12.91 a barrel at the Asia close (0830 GMT).
Meanwhile, 380-cst HSFO cash differential was little changed at a premium of $2.57 a ton, though front-month refining crack rebounded from the previous session to a discount of $7.16 a barrel on Friday.
Residual fuel oil stocks rebounded at key trading hubs Singapore and Fujairah, while stocks held steady at the Amsterdam-Rotterdam-Antwerp (ARA) hub, latest official data showed.
Onshore inventories at Singapore climbed 10% to 20.39 million barrels (3.21 million tons) in the week to June 27, with Kuwait being the top origin for Singapore’s fuel oil imports this week, Enterprise Singapore data showed.
Meanwhile, fuel oil inventories at Fujairah rose 3% to 10.09 million barrels (1.59 million tons) in the week to June 26, showed Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.
Inventories at ARA were stable week-on-week at 1.43 million tons in the week to June 22, holding at two-year highs, latest data from Dutch consultancy Insights Global showed.
Oil prices were on course for a fourth consecutive quarter of losses on Friday, amid concerns over sluggish global economic activity and fuel demand.
China’s Shandong refining hub has begun releasing millions of barrels of oil that were stuck at ports after inspections curbed imports into the province, trading sources said following a meeting this week between officials and refiners.
Chinese refiners are likely to increase diesel exports sharply from late June into July to cash in on higher cash premiums and margins in recent weeks after keeping shipments steady in the previous two months, traders and analysts said.
Russia’s seaborne oil exports from Primorsk, Ust-Luga and Novorossiisk will fall to 1.9 million barrels per day in July from 2.3 million bpd in June as domestic refineries increase runs, Refinitiv Eikon data showed.