Asia’s fuel oil market structure pared back on Thursday after showing some temporary signs of strengthening recently, data from trade sources showed.
The 380-cst high sulphur fuel oil (HSFO) prompt balance-January/February timespread slipped back into a contango after a short-lived backwardation, reflecting sentiment-driven trading.
Meanwhile, very low sulphur fuel oil (VLSFO) reverted into a small contango, after closing at parity levels in the previous session.
Prompt market fundamentals remained soft amid high supply inventories, which continued to hold above average.
There was some mixed sentiment and uncertainty on the outlook, with market sources eyeing developments in Venezuelan oil movements.
Cracks for fuel oil were mixed on Thursday. VLSFO February crack climbed, with a premium nearer to $3.90 a barrel, based on LSEG data. However, the 380-cst HSFO crack retreated, closing at a discount of $6.60 a barrel.
INVENTORY DATA
– Singapore residual fuel inventories fell 5% to 25.41 million barrels (about 4 million metric tons) in the week to January 7, Enterprise Singapore data showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
