Asia’s prompt hi-5 fuel oil spread narrowed by more than 10% week-on-week, after the high sulphur fuel oil (HSFO) market found some uplift in recent sessions, while very low-sulphur fuel oil (VLSFO) was broadly stable.
The January hi-5, which reflects VLSFO’s premium over the price of 380-cst HSFO for that month, closed at $69 a metric ton on Friday, compared to premiums nearer to $80 last week, based on LSEG data. (FO05-380SGMc1)
Singapore’s 380-cst HSFO market logged some recovery this week, with spot bids inching higher day-on-day, though some selling interest continued to cap further upside. The market remained trapped in discounts on ample prompt supply.
Meanwhile, the VLSFO market has been steady this week amid rangebound bids and offers, though the front-month contango widened on Friday.
Fuel oil cracks fell from the previous day, though HSFO (FO380BRTCKMc1) posted weekly gains, closing at a discount of around $6 a barrel, while VLSFO crack (LFO05SGBRTCMc1) ended the session at a premium near $4.25 a barrel.
INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) inched up 0.2% to 1.14 million tons in the week to December 18, 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
