Asia’s very low sulphur fuel oil (VLSFO) market firmed on Wednesday following a term tender that closed on Tuesday, with cash premium and backwardation maintaining at strong levels.
Singapore’s cash premium for 0.5% VLSFO rose to $28.33 a metric ton, while refining margin climbed to a premium of $12.48 a barrel.
The balance-month/Dec backwardation spread for 0.5% VLSFO widened back to above $30 a metric ton.
Kuwait’s state-owned refiner had offered VLSFO supplies from its Al Zour refinery for lifting in the first half of 2024, according to market sources. The volume to be lifted ranged from 80,000 to 120,000 tons per month.
“With the tender offer for the January-June supply…it is clear that there is unlikely any spot liftings for December as well,” said Emril Jamil, a senior analyst at LSEG Oil Research.
Cash differentials across key fuel oil grades had eased earlier this week, though the VLSFO market rebounded on Wednesday.
Meanwhile, high sulphur fuel oil (HSFO) remained bearish. Cash differential for 380-cst HSFO dipped to a discount of $1.50 a ton, while refining margin edged higher slightly to a discount of $14.25 a barrel.
FUJAIRAH INVENTORIES
Fuel oil inventories at Fujairah rose 5.1% to five-week highs, hitting 11.59 million barrels (1.82 million tons) in the week to Nov. 6, showed Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.
Source :Hellenic Shipping News
