Spot differentials for fuel oil were little changed from the previous day, though the market structure showed signs of paring for all key grades.
Intermonth spreads at the prompt forward curve softened on Tuesday, with contango for very low sulphur fuel oil (VLSFO) widening further, while the backwardation for high sulphur fuel oil (HSFO) contracted, based on data from trade sources.
Refining margins also weakened, with April VLSFO/Brent cracks (LFO05SGBRTCMc1) closing lower at premiums near $7 a barrel, while 380-cst HSFO/Brent cracks (FO380BRTCKMc1) closed at discounts of about $4.90 a barrel, based on LSEG data.
As for the spot market, fuel oil differentials were largely rangebound from the previous day, though brisk trading continued for 380-cst HSFO.
Meanwhile, India’s HPCL offered a HSFO cargo for loading in late March via a tender that closes on Thursday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: Six trades
– 0.5% VLSFO: No trade
Source: Reuters
