Asia’s fuel oil market strengthened on Wednesday with firmer bids for spot cargoes and wider backwardation time spreads.
The 380-cst high sulfur fuel oil (HSFO) cash premium rose to $6 a metric ton, while the 380-cst HSFO Oct/Nov time spread widened by $3.25 day-on-day to $12 a ton at the Asia close.
The tight availability of fungible and merchantable fuel in the market may provide support to the term structure should Russian fuel oil volumes contract, analysts from LSEG Oil Research said.
The lower Russian fuel oil volumes could come amid heavier planned seasonal refinery maintenance, which began in early September and is expected to peak in mid-October, the analysts added.
Meanwhile, the 0.5% very low sulfur fuel oil (VLSFO) market also firmed on Wednesday after stronger bids emerged, with the cash premium MFO05-SIN-DIF climbing to $10.41 a ton.
Refining margins for both HSFO and VLSFO climbed. The October 380-cst HSFO crack closed at a discount of $10.65 a barrel at Wednesday’s Asia close, while 0.5% VLSFO closed at a premium of $9.08 a barrel.
In tenders, India’s MRPL offered 40,000 tons of vacuum gasoil for loading between Oct. 16 and 18.
FUJAIRAH INVENTORIES FUJAIRAH
Fuel oil inventories at Fujairah FUJHD04 were little changed at 10.18 million barrels (1.60 million tons) in the week to Sept. 25, showed Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.
Source: Hellenic Shipping News
