Asia’s fuel oil market posted contrasting trends for key grades, with very low sulphur fuel oil (VLSFO) still leaning towards the risk of a downside, while high sulphur fuel oil (HSFO) held onto recent gains.
Cash premium for VLSFO was pegged softer on Monday at $5 per metric ton, with offers dipping for prompt loading dates. Blendstock supply within Asia has been ample since the start of the year, said industry sources.
Cracks for VLSFO continued to hold above $11 per barrel.
Meanwhile, HSFO managed to retain its strength following a rally last week on the derivatives front, supported by the wider tightness in the sour and heavy crude market.
Cracks for prompt 380-cst HSFO contracts held in premiums to crude, with March crack extending gains to a premium of 84 cents a barrel on Monday, LSEG data showed. The crack had flipped into a premium last week.
In the spot market, trading remained thin, though spot premiums were pegged higher amid a wider backwardation.
In tenders, Indonesia’s Pertamina offered a cargo of marine fuel oil for March loading from Sungai Pakning, as well as a cargo of low-sulphur waxy residue from Cilacap, data from industry sources showed.
Some uncertainty lingered for Indonesia’s fuel oil loadings after some issues with export permits earlier this year, said sources.
REFINERY UPDATES
– Nigeria’s Dangote Oil refinery, Africa’s largest, could begin operating at full capacity in 30 days, the head of the refinery said on Monday.
– Lyondell Basell Industries completed the final shutdown of its 263,776-barrel-per-day Houston refinery, people familiar with plant operations said on Friday.
