SINGAPORE: Asia’s cash premium for 380-cst high-sulphur fuel oil (HSFO) rose on Wednesday, lifted by a firmer deal in the physical market, while the prompt-month spread for the residual fuel grade widened its backwardation.
The cash premium for 380-cst HSFO was at 28 cents per tonne to Singapore quotes, up from 10 cents per tonne a day earlier.
The cash differentials, however, have slumped more than 95% over the last month due to weaker-than-expected demand from utilities.
The Nov/Dec time spread for the 380-cst HSFO in Singapore traded at a premium of 25 cents per tonne on Wednesday.
The 380-cst HSFO barge crack for December dipped to a discount of $14.58 a barrel to Brent, compared with minus $14.39 per barrel on Tuesday, Refinitiv Eikon data showed.
Meanwhile, the VLSFO crack slipped to $13.04 per barrel against Dubai crude during Asian trading hours, down from $13.26 a barrel in the previous session.
Cash premium for Asia’s 0.5% VLSFO slipped to $1.93 a tonne to Singapore quotes, as against $2.08 per tonne on Tuesday.
INVENTORIES
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues fell 4.2%, or 321,000 barrels (about 47,900 tonnes), from the previous week to 7.4 million barrels (1.1 million tonnes), data via S&P Global Platts showed.
Compared with year-ago levels, the weekly fuel oil inventories at FOIZ were about 22% lower.
Fuel oil stocks at FOIZ have averaged 10.3 million barrels so far this year, compared with a weekly average of 12.9 million barrels in 2020, Reuters calculations showed.
WINDOW TRADES
Two 180-cst HSFO trades and one 380-cst HSFO trade were reported in the Singapore trading window
No VLSFO cargo trades were reported
Oil prices fell on Wednesday as industry data pointed to a big build in crude oil and distillate stocks in the United States, the world’s largest oil consumer, and as pressure mounted on OPEC to increase supply.
Leaders at the COP26 global climate conference pledged on Tuesday to stop deforestation by the end of the decade and cut emissions of the potent greenhouse gas methane to help slow climate change.