Asia’s high sulphur fuel oil (HSFO) market firmed on Monday amid a flurry of bids, though downstream bunkering demand was slow after crude prices surged.
Strong bidding interest emerged for HSFO on Monday, with the 380-cst HSFO cash differential (FO380-SIN-DIF) climbing to $8.25 a tonne over Singapore quotes.
In contrast, there was no bid for very low sulphur fuel oil (VLSFO), with the 0.5% VLSFO cash differential (MFO05-SIN-DIF) slumping to $1.75 a tonne amid an aggressive offer.
Buying enquiries for bunkering were also thin on Monday after crude prices surged, with shippers retreating to the sidelines.
The surge in prices came after a surprise move by OPEC+ to cut production. Saudi Arabia and other OPEC+ oil producers on Sunday announced further oil output cuts of around 1.16 million barrels per day.
Refining margins for fuel oil retreated on Monday in response to the surge in crude prices. The front-month 0.5% VLSFO crack fell to a premium of $7.57 a barrel at the Asia close (0830 GMT), while the 380-cst HSFO crack slid to a discount of $13.69 a barrel.
OTHER NEWS
– Oil prices surged on Monday, posting the biggest daily rise in nearly a year, after a surprise announcement by OPEC+ to cut more production jolted markets.
– Middle East crude oil supplies are set to tighten further from May after OPEC+ announced plans to cut output again, raising costs for refiners from Asia to Europe and pushing them to seek more supply from Russia, Africa and the Americas.
– Russia’s largest oil producer Rosneft and India’s top refiner Indian Oil Corp agreed to use the Asia-focused Dubai oil price benchmark in their latest deal to deliver Russian oil to India, three sources familiar with the deal said.
– Kazakhstan plans to raise its ceiling on 92/93-octane gasoline prices by 11% and that of diesel by 20% in order to bring them in line with those in neighbouring countries, the country’s energy minister said on Monday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Hellenic Shipping News
