Asia’s spot differentials for fuel oil logged narrower discounts on Friday, though the prompt market continued to hold in a contango.
The very low sulphur fuel oil (VLSFO) market saw a slight improvement after an unplanned outage at Kuwait’s al-Zour refinery, a key producer of VLSFO.
However, the Asia market is still amply supplied by other regions, which means the impact is likely to be capped, said trade sources.
Meanwhile, high sulphur fuel oil (HSFO) market for the 380-cst grade also firmed as bids improved, though prompt time spreads held in a deep contango.
Downstream bunker premiums for both VLSFO and HSFO were hovering steadily in the low $10s over cargo quotes this week, seeing little recovery through the month, sources said.
Fuel oil cracks traded steady to higher. Singapore’s 380-cst HSFO crack (FO380BRTCKMc1) closed largely unchanged at a discount near $5 a barrel, while VLSFO crack (LFO05SGBRTCMc1) rose to a premium of about $6.60 a barrel, data compiled by LSEG showed.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) eased 0.3% to 0.92 million tons in the week to October 30, based on data from Dutch consultancy Insights Global.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters
