Spot differentials for fuel oil continued to edge up on Thursday, with some trade sources noting better downstream demand for marine fuel in recent days.
The uptick was driven by more seasonal buying at the start of the year, some bunker traders said.
Spot cargo differentials and bunker premiums for both high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO) have improved in recent sessions, they added.
However, ample supply inventory continued to cap the extent of recovery, with onshore fuel oil stockpiles still hovering above average levels this week.
Meanwhile, fuel oil cracks extended gains on Thursday. The February 380-cst HSFO/Brent crack (FO380BRTCKMc1) rose to a discount of $7.10 a barrel, while VLSFO crack (LFO05SGBRTCMc1) climbed to a premium of about $3.50 a barrel.
INVENTORY DATA
– Singapore residual fuel inventories (STKRS-SIN) rose 0.3% to 25.47 million barrels (about 4.01 million metric tons) in the week to January 14, Enterprise Singapore data showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
