Asia Fuel Oil-HSFO market weakens sharply amid retreating offers

Spot benchmarks for the 380-cst high sulphur fuel oil (HSFO) market weakened sharply on Tuesday as offers for loading dates in the second half of October dropped further.

Singapore’s cash premium for 380-cst HSFO was pegged at $6.65 per metric ton, more than halving from the previous day, while cracks for November slipped to discounts wider than $9.50 a barrel.

Earlier strength in the market had pared amid prospects of easing tightness. More cargoes should also be directed to East Asia instead of the Middle East, which has exited its peak summer demand period, trade sources said.

The 0.5% low sulphur fuel oil (VLSFO) market has also shown signs of weakening.

Prompt-month cracks for VLSFO closed at premiums of $12.45 a barrel on Tuesday, after hitting nearly eight-month highs of over $15.50 a barrel into late-September.

Amid the weaker turn in HSFO, Singapore’s hi-5 fuel oil spread FO05-380SGMc1 narrowed to about $141 a metric ton on Tuesday.

OTHER NEWS

– Oil prices slid by more than 2% on Tuesday as a stronger supply outlook and tepid global demand growth outweighed fears over escalating conflict in the Middle East and its impact on crude exports from the region.

– Analysts have cut their 2024 oil price forecasts for a fifth consecutive month, citing weaker demand and uncertainty over OPEC’s plans, with prices expected to remain under pressure despite geopolitical risks, a Reuters poll found.

– Taiwan oil refiners are bracing for heavy rain and winds ahead of super Typhoon Krathon’s anticipated landfall, with the storm likely to delay some fuel shipments and prolong maintenances, while key ports are shut, industry sources said.

– Dockworkers on the U.S. East Coast and Gulf Coast on early Tuesday began a strike, their first large-scale stoppage in nearly 50 years, halting the flow of about half the nation’s ocean shipping, after negotiations for a new labor contract broke down over wages.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shreya Biswas)