Spot fuel oil premiums continued to ease on Wednesday, though a flurry of bids remained in the spot market but met with limited offers, especially on the high-sulphur front.
Singapore cash premium for 380-cst high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO) dipped day-on-day, while backwardation at the prompt months narrowed.
Margins also retreated with 380-cst HSFO crack closing at a discount near $3 a barrel, while VLSFO crack closed at a premium of $10.90 a barrel.
The recent strength in HSFO has stalled for now with industry sources eyeing a drop in Chinese demand, as fuel oil buying toughened for independent refineries amid tax and sanction challenges.
Meanwhile, South Korea’s S-Oil closed a tender offering two cargoes of slurry for February loading.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) fell 14.8% to 7.26 million barrels (1.14 million tons) in the week to Jan. 20, based on FOIZ data published by S&P Global Commodity Insights.
