Spot fuel oil premiums retreated slightly on Tuesday, while trade sources said they expect volatility to persist as they awaited Donald Trump’s policies following his return to the White House.
The U.S. President said on Monday that his administration would likely stop buying oil from Venezuela. Oil markets were already volatile after the Biden administration imposed wider sanctions on Russia.
To date, premiums for fuel oil in Asia have more than doubled compared to before the sanctions, pricing data showed.
Spot high sulphur fuel oil (HSFO) was rangebound on Tuesday, while very low sulphur fuel oil (VLSFO) dipped slightly. Bidding activity remained brisk while spot offers were limited.
Meanwhile, margins for HSFO jumped to narrower discounts amid a sharp decline in crude prices, while VLSFO cracks held largely unchanged.
Singapore 380-cst HSFO crack (FO380BRTCKMc1) closed at a discount near $2.55 a barrel, while VLSFO crack (LFO05SGBRTCMc1) was stable near a premium of $11.70 a barrel, showed LSEG data.
INCOMING SUPPLIES
Total fuel oil arriving in Asia held above 6 million metric tons this month, though sliding 7% from last month, calculations based on ship-tracking data showed.
The decline is led by lower arrivals from the West and the Middle East, though regional supplies within Asia edged up.
Supplies from the West totalled about 2.5 million tons, while Middle Eastern arrivals amounted to 2.3 million tons. Meanwhile, intra-regional supplies breached 1.5 million tons.
