Asia Fuel Oil-VLSFO firms; bunker premiums receive boost after more than four months
SINGAPORE, July 26 (Reuters) -Asia's market for very low sulphur fuel oil (VLSFO) logged a weekly climb, while downstream bunker premiums received an uplift after being trapped in a tight range for over four months.
Singapore premiums for delivered VLSFO bunker fuel breached $16 per metric ton this week, with support coming from tighter supply for prompt delivery dates, according to trade sources.
The premiums have been capped at levels near $10 per ton since mid-March amid lukewarm demand and ample supply.
Meanwhile, refining margins for fuel oil also edged higher from the previous week.
VLSFO cracks for August LFO05SGDUBCMc1 closed at premiums of around $11.70 per barrel on Friday, up more than 10% week-on-week, based on LSEG's data.
High sulphur fuel oil margins also retained strength, with 380-cst cracks FO380DUBCKMc1 closing at discounts of about $4.70 per barrel, climbing more than 15% from last week.
As for tenders, Taiwan's Formosa offered 40,000 metric tons of main column bottoms, scheduled to load from Mailiao port between Aug. 17-19, sources said. The tender closes on Friday.
INVENTORY DATA
- ARA inventories STK-FO-ARA were at 1.42 million tons in the week to July 25, largely stable from last week, data from Dutch consultancy Insights Global showed.
OTHER NEWS
- Oil prices remained on track for a third straight week of declines due to weak demand in China, the world's largest crude importer, and expectations of a ceasefire deal for the Gaza war and related violence in the Middle East. O/R
- Imports of Iranian crude have been flowing into the port and refining city of Dalian since late last year, tanker tracking firms and trading sources said, helping sustain the country's purchases of the oil at near record levels.
- Russia's offline primary oil refining capacity has been revised up by 42% for July from the previous plan to 2.5 million metric tons, which is about 9.2% of the total capacity of Russia's primary refining units, according to Reuters calculations based on data from industry sources.
- Differentials for U.S. sour crude Mars have been in a steep decline this month and hit their widest discount to benchmark crude futures since October this week, according to data from brokers, as refiners faced slimmer profit margins due to weak demand.
WINDOW TRADES O/AS
- 180-cst HSFO: No trade
- 380-cst HSFO: No trade
- 0.5% VLSFO: No trade
ASSESSMENTS
FUEL OIL | ||||
CASH ($/T) | ASIA CLOSE | CHANGE | PREV CLOSE | RIC |
Cargo - 0.5% VLSFO | 591.85 | 6.69 | 585.16 | MFO05-SIN |
Diff - 0.5% VLSFO | 7.40 | 0.95 | 6.45 | MFO05-SIN-DIF |
Cargo - 180cst | 496.53 | 6.32 | 490.21 | FO180-SIN |
Diff - 180cst | 8.65 | -0.40 | 9.05 | FO180-SIN-DIF |
Cargo - 380cst | 488.22 | 5.64 | 482.58 | FO380-SIN |
Diff - 380cst | 8.40 | -0.10 | 8.50 | FO380-SIN-DIF |
Bunker (Ex-wharf) Premium - 380cst | 8.50 | -0.50 | 9.00 | |
Bunker (Ex-wharf) Premium - 0.5% VLSFO | 10.00 | 1.00 | 9.00 |
For a list of derivatives prices, including margins, please double click the RICs below. | |
Brent M1 | BRENTSGMc1 |
180cst M1 | FO180SGSWMc1 |
180cst M1/M2 | FO180SGSDMc1 |
180cst M2 | FO180SGSWMc2 |
Visco M1 | FOVISSGDFMc1 |
Visco M2 | FOVISSGDFMc2 |
380cst M1 | FO380SGSWMc1 |
380cst M1/M2 | FO380SGSDMc1 |
380cst M2 | FO380SGSWMc2 |
Cracks 180-Dubai M1 | FO180SGCKMc1 |
Cracks 180-Dubai M2 | FO180SGCKMc2 |
East-West M1 | FOSGEWMc1 |
East-West M2 | FOSGEWMc2 |
Barges M1 | HFOFARAAMc1 |
Barges M1/M2 | HFOFARAASMc1 |
Barges M2 | HFOFARAAMc2 |
Crack Barges-Brent M1 | HFOFARAACMc1 |
Crack Barges-Brent M2 | HFOFARAACMc2 |
Reporting by Jeslyn Lerh; Editing by Mrigank Dhaniwala
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