SINGAPORE: Singapore’s very low sulphur fuel oil (VLSFO) market has retreated from an earlier rally amid prospects of higher regional inflows this month.
The 0.5% VLSFO cash differential fell day-on-day to a premium of $78.20 per tonne to Singapore quotes on Wednesday. The market has cooled off slightly from a record high of $86.23 per tonne seen on July 14.
Intra-Asia flows were pegged at 906,000 tonnes for July, surpassing June’s 600,000 tonnes, amid elevated flows from Thailand, Japan and South Korea, based on Refinitiv data this week.
The arrival of blending components from regional tenders was likely to ease supply tightness.
The slightly-weaker LSFO market is also largely due to a weaker gasoil market, with prompt cracks to Dubai easing off from peaks at the start of the month, said Emril Jamil, Asia senior fuel oil analyst at Refinitiv Oil Research.
Meanwhile, Singapore cash differentials for high sulphur fuel oil were little changed on Wednesday amid thin trading activity.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues climbed 3% from the previous week to 12.55 million barrels (1.98 million tonnes) in the week ended July 18, latest data from S&P Global Commodity Insights showed.
Oil prices dipped on Wednesday, pressured by global central bank efforts to tame inflation and ahead of expected builds in US crude inventories as product demand weakens.
China’s exports of very-low-sulphur marine fuel was flat in June versus May at 1.41 million tonnes, with year-to-date sales remaining 7% below year-prior levels, customs data showed on Wednesday.
India has cut a windfall tax on oil producers and refiners and exempted gasoline from an export levy, less than three weeks after it imposed the two charges.
Iran is increasing supplies of a key crude grade that Venezuela is using to boost its aging refineries’ productivity and free domestic oil for exports, documents seen by Reuters showed.
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