Spot premiums for fuel oil extended a slight rebound on Tuesday, reflecting firmer bids for the January trading cycle.
A higher-priced trade emerged for a parcel of very low sulphur fuel oil (VLSFO) loading in early January, while backwardation for the January-February contract also widened.
Refining margin for VLSFO also firmed, with front-month cracks climbing above $10 per barrel at Tuesday’s Asia close.
Meanwhile, spot market for high sulphur fuel oil (HSFO) also received an uplift in recent sessions, though overall recovery was capped by plentiful supplies to Asia.
Singapore 380-cst HSFO cracks closed lower at discounts of about $5 per barrel on Tuesday, based on LSEG data, while spot premiums steadied.
The hi-five spread FO05-380SGMc1 widened slightly day-on-day, but remained narrow below $100 per ton.
INCOMING SUPPLIES
Total fuel oil supplies to Asia are expected at about 7 million tons for December, showed ship-tracking data, with some cargo arrivals spilling over from November. Overall arrivals have been higher in the fourth quarter.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shounak Dasgupta)
