Spot differentials for fuel oil markets were little changed on Friday in Asia as pre-Diwali holiday trade was thin, while some trade sources said supply outlook was slightly towards the year-end for high sulphur fuel oil (HSFO).
The markets have been largely weighed by ample prompt supply, with the differentials holding steadily in discounts towards the end of the week.
However, perspectives for HSFO’s supply outlook were mixed into the year-end. Some traders said that it will tighten slightly due to slower Russian exports, while others said that the broader market remains flooded by Middle Eastern barrels.
Meanwhile, Singapore’s cash differential for very low sulphur fuel oil (VLSFO) held stable at a discount of $2.75 a metric ton. Supply of this fuel oil grade remained plentiful, though bunker premiums inched slightly higher this week as more prompt buying emerged mid-week, some trade sources said.
Cracks were broadly steady, with the November VLSFO crack (LFO05SGBRTCMc1) hovering above a premium of $6 a barrel, while 380-cst HSFO crack (FO380BRTCKMc1) held at a discount close to $4 a barrel, data compiled by LSEG showed.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) rose 4.3% to 0.97 million tons in the week to October 16, based on data from Dutch consultancy Insights Global.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
