Asia’s high sulphur fuel oil (HSFO) premium held largely stable on Tuesday, while a flurry of rangebound trades continued to emerge in the spot market.
The 380-cst HSFO cash premium held above $21 a metric ton to cargo quotes, as with the previous session. The market has maintained its strength in recent sessions as bullish bidding persisted, despite higher supplies eyed for the month.
In contrast, the very low sulphur fuel oil (VLSFO) market stayed bearish in lukewarm demand and ample supply, based on trade sources. The Singapore spot discount widened on Tuesday, with spot offers declining from the previous session.
Refining margins fluctuated in volatile trade, with April VLSFO/Brent crack (LFO05SGBRTCMc1) climbing to premiums near $8 a barrel, while 380-cst HSFO cracks (FO380BRTCKMc1) closed lower at discounts of about $2.20 a barrel, based on LSEG data.
REFINERY UPDATES
– China’s newest refiner Shandong Yulong Petrochemical is expected to start test operating its second crude oil processing unit late this month, trading sources with knowledge of the plant’s operations said.
– Indonesia will build oil refineries on several of its islands, including Kalimantan and Sulawesi, with a total capacity of 1 million barrels per day, upgrading from a planned single refinery with a 500,000 bpd capacity, the energy minister said.
– The Kirishi oil refinery in northwest Russia has not stopped oil processing following a drone attack on Saturday, two sources familiar with the plant’s operations told Reuters on Monday.
– U.S. oil refiners are expected to have about 1.1 million barrels per day of capacity offline in the week ending March 14, increasing available refining capacity by 85,000 bpd, research company IIR Energy said on Monday.
