The cash premium for very low sulphur fuel oil (VLSFO) in Asia softened for a fourth straight session on Wednesday, underpinned by weaker spot offers and ample supply expectations into June.
The premium for 0.5% VLSFO (MFO05-SIN-DIF) slid to $7.75 a tonne to Singapore quotes, though front-month margin (LFO05SGDUBCMc1) rose to a premium of $9.93 a barrel at 0830 GMT.
High sulphur fuel oil (HSFO) held steady to weaker amid thin trade. The 380-cst HSFO premium eased to $4.35 a tonne, and front-month margin (FO380DUBCKMc1) closed lower at a discount of $8.97 a barrel.
The price difference between VLSFO and HSFO remained narrow, weighed by downside risk of the VLSFO market. The front-month price spread, known as Hi-5, closed at $120 a tonne on Wednesday. (FO05-380SGMc1)
“We believe the supply of blending components and incremental supply of low sulphur fuel oil will continue to weigh on the Hi-5 spread, with further contraction expected if gasoil/Dubai (margin) fails to recover,” said Emril Jamil, senior analyst for fuel oil at Refinitiv.
FUJAIRAH INVENTORIES
Fujairah fuel oil inventories eased at 11.16 million barrels (1.76 million tonnes) in the week to May 22, coming off from six-month highs in the previous week, showed Fujairah Oil Industry Zone data published by S&P Global Commodity Insights on Wednesday.
OTHER NEWS
– Oil prices rose on Wednesday after data showed U.S. inventories and fuel supplies tightening, while a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts.
– Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Tuesday he would inflict more pain on short sellers and told them to watch out just days before a planned OPEC+ meeting to decide on future oil policy.
– The Russian government is considering a possible gasoline export ban to prevent domestic fuel shortages and price increases after a decision to reduce subsidies for refineries, industry and government sources told Reuters.
– A new oil refinery belonging to Mexico’s state-owned Pemex, a top priority of the country’s president, will again miss its promised launch date to begin production, according to an internal audit report seen by Reuters.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Hellenic Shipping News
