Asia’s very low sulphur fuel oil (VLSFO) steadied on Thursday following a recent spike, while backwardation timespreads also eased after jumping past a year’s high.
The Singapore 0.5% VLSFO cash premium MFO05-SIN-DIF continued to edge higher on Thursday at $27.39 a metric ton, though the gain was milder after a sharp jump on Wednesday.
Market backwardation cooled slightly, with the balance-month/Dec timespread narrowing to $29.75 a ton on Thursday, compared with $34.50 a ton on Wednesday.
Led by the recent strength in the VLSFO market, the cash differential for 380-cst high sulphur fuel also flipped back into a premium, though market recovery is capped by persisting bearish factors.
The 380-cst HSFO differential rebounded to a premium of 25 cents a ton on Thursday, after its recent slump into discounts.
SINGAPORE INVENTORIES
Onshore fuel oil inventories fell 0.5% to 19.44 million barrels (3.06 million metric tons) in the week ended Nov. 1, data from Enterprise Singapore showed.
The dip came amid a firm market backwardation, which discourages storage economics and prompts selling interest as spot prices are higher than for later months, though a jump in net fuel oil imports capped the drawdown.
Source: Hellenic Shipping News
