Asia’s high sulphur fuel oil (HSFO) market pared back on Monday after rallying higher amid recent volatility, while very low sulphur fuel oil (VLSFO) was rangebound from the previous week.
Prompt intermonth spreads for 380-cst HSFO narrowed to $9 a ton on Monday, after widening to over $10 a ton on Friday, based on data from market sources.
Cracks also retreated amid sell-offs and a stronger crude. The prompt 380-cst HSFO/Brent crack (FO380BRTCKMc1) closed lower at a discount near $1.85 a barrel on Monday, after hitting multi-year highs last week, based on LSEG data.
Market sources expect trading to remain choppy for the high-sulphur markets due to uncertain supply factors.
Spot premiums for HSFO inched lower for now, as more competitive offers emerged on Monday. Meanwhile, VLSFO was largely rangebound in thin activity.
The hi-5 fuel oil spread recovered after narrowing to its lowest premium in over five years. Front-month March contract (FO05-380SGMc1) rebounded to above $85 a metric ton on Monday, LSEG data showed.
Meanwhile, India’s HPCL offered more HSFO for loading in February via a tender that closes on Tuesday, based on market sources.
TRUMP TARIFFS
– U.S. President Donald Trump ordered 10% tariffs on Canadian oil and 25% tariffs on Mexican crude. This could offer European and Asian refineries a competitive advantage against their U.S. rivals, analysts and market participants told Reuters.
– The new tariffs imposed by U.S. President Donald Trump on imports from Canada, Mexico, and China are likely to have a limited near-term impact on global oil and gas prices, Goldman Sachs said in a note.
