Asia’s fuel oil benchmarks climbed on Tuesday with refining margin scaling a four-month high, while more tenders for November-loading cargoes were underway.
The front-month 0.5% VLSFO crack LFO05SGDUBCMc1 closed at a premium of $13.55 a barrel on the final trading day of October, logging a monthly increase of about 40%.
Market sources expect capped incoming supplies from Kuwait to Asia even into November.
Kuwait’s October fuel oil exports tumbled more than 30%, after hitting a record high in September as some supply was diverted to domestic power generation, according to trade sources, analysts and ship-tracking data.
Asia’s cash premium for very low sulphur fuel oil (VLSFO) MFO05-SIN-DIF rose for a third straight session to $19.88 a metric ton, as bids for spot cargoes continued to firm.
Meanwhile, high sulphur fuel oil (HSFO) steadied on Tuesday. Cash differentials for 380-cst HSFO FO380-SIN-DIF remained trapped in discounts, while cracks FO380DUBCKMc1 rose slightly to a discount of $17.75 a barrel on Tuesday.
Kuwait’s KPC offered 60,000 tons a month of HSFO for loading between November and January, while South Korea’s S-Oil offered slurry and light cycle oil for loading in November. Both tenders close on Tuesday, trade sources said.
Source: Hellenic Shipping News
