SINGAPORE: Asia’s fuel oil market structure and cash premiums eased further on Thursday amid thin activity, while onshore inventories at Singapore rose for a second straight week.
Spot 0.5% very-low sulphur fuel oil (VLSFO) fell to $5.35 a tonne over Singapore quotes as lower offers continued to emerge, while market backwardation also eased from the previous day. Front-month refining margin rose to a premium of $10.51 a barrel as crude prices eased in Asia trading hours.
High sulphur fuel oil’s (HSFO) market structure also softened, with front-month contango widening for the 180-cst HSFO product.
Meanwhile, the cash differential for 380-cst HSFO was stable at a premium of $1.25 a tonne over Singapore quotes, while front-month margin closed lower at a discount of $10.28 a barrel.
Onshore fuel oil stocks rose 3% to a five-week high of 19.57 million barrels (2.98 million tonnes) in the week ended June 7, based on Enterprise Singapore data.
Despite the recent rebound, weekly fuel oil inventories still held below a year-to-date average of 3.32 million tonnes per week, the data showed.
The United Arab Emirates overtook Malaysia as the top origin for Singapore’s fuel oil imports, followed by Indonesia and Brazil.
Oil prices were little changed in Asia trade on Thursday as investors weighed demand concerns from a global economic slowdown against an expected fall in supply from Saudi output cuts.
Bangladesh is facing its worst electricity crisis since 2013, a Reuters analysis of government data shows, due to erratic weather and difficulty paying for fuel imports amid declining forex reserves and value of its currency.
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