Asia Fuel Oil-Cargo premiums retain strength on firmer bids

Asia’s market for very low sulphur fuel oil (VLSFO) retained its strength on Wednesday, with cargo premiums climbing amid firmer spot bids for September loading dates.

Spot benchmarks recently jumped to their highest in more than nine months as supplies tightened with a lack of blending components for marine fuels at the Singapore hub.

The cash premium rose above $19 per metric ton to Singapore quotes on Wednesday, while backwardation for the balance-September and October contract widened to $28 per ton.

High sulphur fuel oil (HSFO) also extended gains, with the cash premium for the 380-cst grade climbing above $13 per ton.

In tenders, Pakistan’s PSO offered 50,000 tons of 180-cst HSFO for loading in late September. The tender closes on Wednesday.

INVENTORY DATA
– Fujairah heavy fuel inventories FUJHD04 fell 10.5% to 8.00 million barrels (1.26 million tons) in the week to Sept. 2, showed FOIZ data published by S&P Global Commodity Insights.

OTHER NEWS
– Oil fell slightly on Wednesday, hovering at their lowest since December after plunging more than 4% the previous day, amid signs of a weak global economy, lacklustre oil demand and expectations of an end to a dispute halting Libyan exports. O/R

– A power outage in the Rotterdam port area in the Netherlands briefly interrupted operations at one of Europe’s biggest oil refineries on Tuesday, the plant’s operator BP said.

– Singapore will allow for night movement of line-towed container barges to and from Pasir Panjang Terminal, following a four-month trial, the Maritime and Port Authority of Singapore said in a statement on Wednesday.

– Valero Energy Corp began restarting the large crude distillation unit at its 360,000 barrel-per-day (bpd) Port Arthur, Texas, refinery on Tuesday, said people familiar with plant operations.

WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Mrigank Dhaniwala)