SINGAPORE: Asia’s very-low sulphur fuel oil (VLSFO) market steadied on Thursday after sliding over the last four sessions, while onshore inventories at Singapore slipped further to nine-month lows.
The premium for 0.5% VLSFO rose to $8.25 a tonne over Singapore quotes as market backwardation widened, while front-month margin climbed to a premium of $10.11 a barrel at 0830 GMT.
Weekly residual fuel oil stocks at Singapore have fallen for a seventh consecutive week, as western arbitrage supplies dipped in May, while China’s purchases were steady.
The high-sulphur fuel oil (HSFO) market remains little changed in the week. The 380-cst HSFO premium closed at $4.40 a tonne on Thursday, while front-month margin was at a discount of $8.79 a barrel.
Onshore fuel oil stocks fell to 17.49 million barrels (2.75 million tonnes) in the week to May 24, based on Enterprise Singapore data. The weekly inventory level was last lower in August 2022.
Weekly net fuel oil imports, calculated by subtracting total exports from total imports, fell 21% week-on-week to 427,000 tonnes.
Meanwhile, a rare fuel oil cargo emerged from Djibouti in the same week, likely the city-state’s first ever import from the African country as ship-tracking firms have no record of fuel oil shipped from Djibouti to Singapore.
Oil prices fell on Thursday after Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting next week.
Tugboats refloated a large ship that had been stranded for several hours in the Suez Canal on Thursday, and sources said shipping traffic through one of the world’s busiest waterways had returned to normal. Norway’s Aker BP on Thursday reported a bigger-than-expected oil discovery of up to 90 million barrels of oil in the Yggdrasil area of the North Sea.
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