SINGAPORE: The cash premium of high sulphur fuel oil (HSFO) strengthened in Asia on Tuesday amid firm demand prospects, trade sources said.
The Middle East is expected to lower HSFO exports due to summer residual fuel burning, while China is likely to continue importing strong volumes of fuel oil for use as refinery feedstocks.
Singapore’s spot premium for 380-cst HSFO climbed to $7.25 a tonne on a firmer trade, while its front-month refining crack rose to a discount of $11.10 a barrel at the Asia close (0830 GMT).
Meanwhile, the very low sulphur fuel oil (VLSFO) market was little changed, with the spot market trapped in thin premiums over Singapore quotes.
VLSFO rose slightly to a premium of $3.08 a tonne, while the market’s front-month crack edged higher to a premium of $8.58 a barrel at the Asia close.
Bunker sales slid for a third straight month at the UAE’s Fujairah to hit fresh lows in March, according to the latest Fujairah Oil Industry Zone data that commenced publishing in 2021.
Total bunkering volumes, excluding lubricants, fell to 559,800 cubic metres (about 555,000 tonnes) in March, based on data from the Fujairah Oil Industry Zone published by industry information service S&P Global Commodity Insights.
Some bunkering demand could have been diverted away from Fujairah this year to Khor Fakkan, where prices were nearly $5 a tonne cheaper than Fujairah last month, said Dubai-based trade sources.
Oil prices fell on Tuesday as upbeat Chinese economic data failed to deflect the focus from a possible increase to US interest rates and wider concern about the growth outlook.
China’s diesel exports shipments surged to 1.44 million tonnes, up 113.8% in March, from 0.67 million tonnes a year ago, General Administration of Customs data showed on Tuesday.
South Korea on Tuesday said that it will extend sales tax breaks on some oil products, which were originally due to expire at the end of April, by another four months, citing still-burdensome prices for the people.
Iraq’s federal government and the Kurdistan Regional Government (KRG) have ironed out technical issues essential to resuming northern oil exports from the Turkish port of Ceyhan to international markets, four sources told Reuters.