Spot premiums for fuel oil narrowed further in Asia on Wednesday, while the market eyed several sales tenders from regional refiners this week.
Singapore cash premium for very low sulphur fuel oil (VLSFO) was pegged at 95 cents a metric ton to cargo quotes, with a competitive offer emerging for prompt loading dates. Meanwhile, bids mostly retreated to parity versus Singapore cargo quotes.
Cash premiums for high sulphur fuel oil (HSFO) also weakened on the back of lower-priced offers, while sell-offs persisted on the derivatives front.
Refining margins also trended steady to softer. Cracks for 380-cst HSFO fell towards discounts of $5.40 a barrel, while VLSFO cracks LFO05SGDUBCMc1 held near premiums of around $11 a barrel, based on LSEG data at Asia close.
The market was eyeing some tenders from regional refiners.
Malaysia’s Pengerang Refining sold a second cargo of atmospheric residue for loading in December via a tender that closed on Wednesday, based on trade sources. The cargo of 450,000 barrels is scheduled to load between Dec. 18 and 20.
The previous atmospheric residue cargo will load in the earlier half of December and will likely head for China, a fuel oil trader said.
Taiwan’s CPC offered a cargo of catalyst fractionator bottoms totalling 23,000 tons for December loading. The tender closes on Wednesday with validity until Friday, according to a notice on CPC’s website.
Meanwhile, hi-5 spreads widened back to above $100 a ton, reflecting the weakening HSFO market in recent sessions.
INVENTORY DATA
– Fujairah heavy fuel inventories rebounded 36.6% to 8.56 million barrels (1.35 million tons) in the week to Dec. 2, FOIZ data published by S&P Global Commodity Insights showed.
