Spot differentials for both high sulphur fuel oil (HSFO) and very low sulphur fuel oil (VLSFO) extended declines on Wednesday, while prompt market structure showed further signs of softening.
Timespreads for both 180-cst HSFO and 380-cst HSFO traded into a deeper contango, with traders selling off. Prompt offers for 380-cst HSFO also declined. The weakness is driven by a well-supplied market.
Meanwhile, VLSFO market also softened. In spot sales, Malaysia’s PRefChem offered more atmospheric residue for loading in November, which will add to regional supplies.
The cargo of 540,000 barrels is expected to load between November 13 and 14, with the tender closing later this week.
Fuel oil margins traded lower. Singapore’s 380-cst HSFO crack (FO380BRTCKMc1) fell sharply to a discount wider than $4.50 a barrel, while VLSFO’s crack (LFO05SGBRTCMc1) eased back to a premium below $6 a barrel, data compiled by LSEG showed.
INVENTORY DATA
– Fujairah heavy fuel inventories (FUJHD04) fell 23.8% to 6.49 million barrels (1.02 million tons) in the week to October 27, FOIZ data published by S&P Global Commodity Insights showed.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
