Asia fuel oil markets softened at the end of the trading week, as ample prompt supply continued to weigh on recovery.
Malaysia’s PRefChem continued to offer residual fuel. The refiner offered 540,000 tons of low-sulphur atmospheric residue for loading between October 12 and 13 in its latest tender, which will close next week, market sources said.
Benchmarks for the very low sulphur fuel oil (VLSFO) market were steady to slightly bearish on Friday. Meanwhile, spot offers for high sulphur fuel oil (HSFO) remained under pressure, weighing on cash differentials.
Selling interest for 180-cst HSFO has emerged this month, pulling the product’s cash differential into a steep discount. The 380-cst HSFO market also weakened day-on-day, with front-month backwardation narrowing.
Cracks traded lower on Friday. The VLSFO November crack closed at a premium near $7.70 a barrel, while 380-cst HSFO crack closed at a discount of around $4 a barrel, data compiled by LSEG showed.
INVENTORY DATA
– ARA fuel oil inventories fell 2.0% to 0.945 million tons in the week to October 2, based on data from Dutch consultancy Insights Global.
Source: Reuters
