Asia’s fuel oil markets continued to be barren of deals on Friday, as thin trading liquidity on the window persisted against a backdrop of consistently bearish outlooks for January.
Ample inventories will continue to be a near-term market driver, multiple trade sources said.
Fuel oil arrivals into Singapore are still slated to hit a fresh high in December of above 3.4 million metric tons, LSEG shiptracking data showed.
Some off-spec crude cargoes from west Africa will likely add on to these pool of availability, especially for very low sulphur fuel oil, one trade source said, adding that overall Brazil-origin arrivals are also high since a few weeks earlier.
Cash premiums for VLSFO declined further to slightly below $2 per ton, as lower-priced offers emerged despite the market’s backwardation slightly widening from the previous trading session.
Meanwhile, premiums for 380-cst high sulphur fuel oil gained slightly to around $4.75 per ton, mostly reflect the wider backwardation given a persistent buy-sell gap.
The hi-5 spread (FO05-380SGMc1) widened slightly from a week earlier to around $95 per ton, but was little changed from the previous trading session.
