Cracks for 380-cst high sulphur fuel oil (HSFO) showed further signs of easing on Thursday, trading down at about parity to crude, though intermonth spreads retained strength at the prompt forward curve, said market sources.
Singapore 380-cst HSFO crack (FO380BRTCKMc1) closed at parity value to both Brent and Dubai respectively on Thursday, based on LSEG data, with cracks touching discounts after the Asia closing time.
The cracks flipped into premiums late last week and hit over five-year highs. Several trade sources have said that the rally may not last as Russian fuel oil supply is still expected to land in Asia, while poor Chinese demand weighed.
However, there was still some risk priced into the prompt forward curve, with March/April backwardation spreads still going strong, a trader said.
Meanwhile, cracks for very low sulphur fuel oil (VLSFO) fell day-on-day towards premiums of $11.70 a barrel. (LFO05SGBRTCMc1)
In spot tenders, Taiwan’s Formosa offered 35,000 tons of low sulphur straight-run fuel oil for loading between March 5 and 7, based on industry sources. The tender closes on Thursday.
As for inventories, onshore stockpiles of heavy residue at Singapore rebounded above 20 million barrels in the week.
INVENTORY DATA
– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 20.08 million barrels (3.16 million tons) in the week to Feb. 12, up 4.3% from the previous week, Enterprise Singapore data showed.
