Spot premiums for very low sulphur fuel oil (VLSFO) slipped further on Wednesday, hitting their lowest in the year to date, dragged by slow refuelling demand from the bunkering sector.
The Singapore VLSFO cash premium dipped below $2 per metric ton to cargo quotes, while bunker premiums on a delivered basis remained stuck in a range of narrow premiums below $10 per ton, based on trade sources.
Meanwhile, high sulphur fuel oil (HSFO) retained its recent strength in a sentiment-driven rally.
This has narrowed the hi-5 marker (FO05-380SGMc1) in recent sessions, with the prompt spread contracting below $60 per ton on Wednesday, holding at multi-year lows.
Spot market activity has thinned this week, though HSFO spreads for 380-cst March/April widened day-on-day to $19.50 per ton as volatile trading continued on the derivatives patch.
Refining cracks for both grades inched lower on Wednesday. Prompt 380-cst HSFO crack (FO380BRTCKMc1) closed at a discount near 30 cents per barrel, while VLSFO crack fell to a premium of around $9.30 per barrel.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) fell 6.7% to 9.34 million barrels (1.47 million tons) in the week to Feb. 24, according to FOIZ data published by S&P Global Commodity Insights.
