Spot differentials in Asia fuel oil markets held in range-bound discounts on Thursday, as high inventories continued to weigh on price recovery.
Onshore fuel oil stockpiles in Singapore rebounded to about 25 million barrels as cargo inflows surged, latest data showed.
Brazil was the top origin of supply for a second consecutive week, followed by strong inflows from the United Arab Emirates.
Current market structure remained conducive for storage incentive, with High-Sulphur Fuel Oil (HSFO) and Very-Low Sulphur Fuel Oil (VLSFO) in contango for prompt trading months.
VLSFO differentials edged firmer for prompt loading dates as one trading house placed a stronger bid. However, prices for later loading dates remained weighed by discounts.
Meanwhile, fuel oil cracks traded in mixed directions day-on-day. Singapore’s 380-cst HSFO crack (FO380BRTCKMc1) fell to a discount near $4.95 a barrel, while VLSFO crack (LFO05SGBRTCMc1) rebounded back above a premium of $6 a barrel, data compiled by LSEG showed.
INVENTORY DATA
Singapore residual fuel inventories (STKRS-SIN) rose 7.6% to 24.78 million barrels (about 3.90 million metric tons) in the week to October 29, Enterprise Singapore data showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
