Spot differentials for Asia’s high sulphur fuel oil (HSFO) market slipped into steeper discounts on Tuesday, with several trades emerging for the 380-cst product at softer values.
The fuel mostly traded at discounts of $6 a metric ton to cargo quotes, while the market structure held in a wide contango at the prompt months.
In the broader market, ample availability weighed on prices for early loading dates. Middle eastern volumes to East Asia have been strong in recent months after the exporting region exited summer demand, with higher volumes adding to onshore inventories in Singapore.
As for very low sulphur fuel oil (VLSFO), benchmarks softened again after a short-lived rebound, as ample blendstocks capped the extent of recovery.
Downstream bunker premiums for both HSFO and VLSFO were steady to slightly softer from last week, with premiums dipping below $10 per ton for later delivery dates, based on indications from trade sources.
Fuel oil cracks were mixed in direction. VLSFO crack for December (LFO05SGBRTCMc1) inched lower to a premium near $7.25 a barrel, after hitting a more than three-week high. Meanwhile, 380-cst HSFO crack (FO380BRTCKMc1) closed at discount of $4.37 a barrel, broadly rangebound, showed data compiled by LSEG.
REFINERY UPDATES
– Exxon Mobil is exploring more refinery upgrades as it hones in on higher-value products, an executive told Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade – 380-cst HSFO: Seven trades – 0.5% VLSFO: No trade
Source: Reuters
