Asia’s fuel oil markets began the week with slow trading momentum, with traders remaining cautious on forward demand-supply fundamentals and the impact of China’s buying activity would pan out.
A buy-sell gap continued to hinder window trading activity, with the market barren of deals for the fourth consecutive session.
There were talks of some changes in China’s import tax policies and naming convention of fuel oil in its import classification system starting next year. Some traders expect that it may weigh slightly on China buying given that feedstock costs for processing refined fuels will likely indirectly be affected.
Cash premiums for 380-cst high sulphur fuel oil gained to above $5 a ton, as China-based bidders were aggressive on the open trading window, though a lack of cheap offers were scant in the market.
For very-low sulphur fuel oil, premiums continued to slip to around $1.7 a ton reflecting the narrower backwardated swap prices structure.
The market’s hi-5 spread (FO05-380SGMc1) was little changed at around $94 per metric ton.
INVENTORIES
– Refined oil product stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by nearly 3% on the week to their highest since May 2023, data from Dutch consultancy Insights Global showed.
– U.S. crude stocks drew down more than expected on strong refinery runs, while distillate inventories fell thanks to higher truck traffic during the holiday season and cold weather, data from the Energy Information Administration showed on Friday.
REFINERY NEWS
– BP’s BP.L 435,000-barrel-per-day (bpd) Whiting, Indiana, refinery was operating normally following a leak from a pipeline that transports liquid material, the company said.
Source: Reuters
