Spot premiums for fuel oil inched further up on Wednesday, while the market expects volatile trading to persist for high sulphur fuel oil (HSFO).
The impact of the latest sanctions was not immediately clear on Russian supply flows, several traders said, with more clarity expected into February.
There will likely be more support for prices and premiums of unsanctioned HSFO barrels, though overall benchmark gains appear capped as inventories in Asia remained high in the near term.
Margins for 380-cst HSFO retreated day-on-day at discounts of about $5.50 per barrel, based on LSEG data for Brent-basis cracks.
Meanwhile, cracks for very low sulphur fuel oil (VLSFO) closed at premiums above $10.40 per barrel.
Backwardation spreads were largely stable for VLSFO at the prompt months on Wednesday, though HSFO spreads widened amid more volatile trading in recent sessions, said market sources.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) eased 4.5% to 8.52 million barrels (1.34 million tons) in the week to Jan. 13, based on FOIZ data published by S&P Global Commodity Insights.
