SINGAPORE: Asia’s spot fuel oil market eased further on Tuesday amid thin trade, while backwardation in the very low sulphur fuel oil (VLSFO) market weakened day-on-day.
The front-month 0.5% VLSFO timespread was at a backwardation of $9.75 a tonne at the Asia close (0830 GMT) on Tuesday, narrowing from $11 a day ago.
Reflecting a weaker market structure, the 0.5% VLSFO cash differential eased for a fifth straight session to a premium of $9.33 a tonne to Singapore quotes on Tuesday.
Expectations of ample supplies weighed on the market, though steady bunkering demand at Singapore should cap the decline in spot premiums.
Marine fuel prices fell month-on-month in November and this had incentivised some shippers to agree to bigger-volume deals, bunker fuel traders said, while demand is expected to be steady into December.
Marine fuel sales at Singapore jumped to a 22-month high in November, latest official data showed on Tuesday, as lower prices lifted buying interest at the world’s largest bunkering hub.
November bunker sales totalled 4.37 million tonnes, climbing 3% month-on-month and 4% year-on-year, data from Singapore’s Maritime and Port Authority showed. Oil extended gains in Asia trade on Tuesday as a key pipeline bringing supply to the United States remained shut, adding to concerns about potential tightness in the world’s biggest crude consumer.
China is making fast inroads in the market for new-build liquefied natural gas tankers as local and foreign shipowners turn to its shipbuilders for the specialty vessels because long-dominant yards in South Korea are fully booked.
Oil output from top shale regions in the United States is due to rise by about 94,500 barrels per day (bpd) to a record 9.32 million bpd in January, the US Energy Information Administration said.
Brazilian oil and gas regulator ANP has ordered the temporary closure of 37 production facilities of state-run oil company Petrobras in the state of Bahia, the company said in a statement.
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