SINGAPORE: A trade for 180-cst high sulphur fuel oil (HSFO) emerged on Tuesday after more than two weeks of thin activity.
Vitol bought a 20,000-tonne cargo of 180-cst HSFO from P66 for loading from Nov. 23 to Nov. 27, at a discount of $2 per tonne to the average of balance-month Singapore quotes.
However, the overall HSFO market recovery remains capped as global supplies were plentiful, while demand from the bunkering sector for high-sulphur marine fuel grades held little changed.
The 180-cst HSFO cash differential fell $1.49 to a premium of $2.43 per tonne to Singapore quotes on Tuesday, while the 380-cst HSFO cash differential dipped 28 cents to a premium of $6.25 per tonne.
Lower HSFO exports from the Middle East have helped to buoy the market slightly in recent sessions, but expectations of more incoming Russian barrels kept the supply outlook ample.
Meanwhile, the cash differential for 0.5% very low sulphur fuel oil gained $1.02 to a premium of $5.17 per tonne on Tuesday. The spot market had steadied after recently declining to nearly two-month lows. Oil prices slipped in Asia trade on Tuesday as recession concerns and worsening COVID-19 outbreaks in China sparked fears of lower fuel demand, outweighing supply worries.
China’s refined oil product exports in November are set to hit the highest since April 2020 as refiners ramp up output to multi-month highs to boost diesel supply and profit, offsetting the impact of slower domestic demand from COVID-19 restrictions.
Taiwan’s Formosa Petrochemical Corp has resumed full production at its No. 1 residue desulphurisation (RDS) unit after an unplanned outage in the past few days.
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