Asia Fuel Oil-Margins dip sightly; Kuwait offers HSFO supplies

Refining margins for fuel oil weakened slightly in Asia on Thursday, while Kuwait offered high sulphur fuel oil (HSFO) for loading between March and June.

The refiner has been active in spot tenders in recent weeks, offering four cargoes of 380-cst HSFO for loading from end-March to June in a tender that closes on Thursday. Each cargo is 60,000 metric tons, trade sources said.

Benchmarks for fuel oil have been capped in Asia by ample supplies, with onshore inventories climbing to a three-week high, latest data showed.

Saudi Arabia became the top origin for arrivals into landed storage in Singapore in the week, followed by Russia and Oman. Meanwhile, top destinations for outflows were China and Indonesia, excluding volumes to storage hub Malaysia.

Cracks for 380-cst HSFO ended at a discount of $10.19 a barrel at the Asia close (0830 GMT), sliding from early Asia trade.

Meanwhile, cracks for very low sulphur fuel oil fell to a premium of $13.36 a barrel.

BUNKER SALES

Singapore’s February bunker fuel sales fell 8.1% from January to 4.51 million tons, official data showed on Thursday, weighed down by a seasonal demand lull and as some ships took longer to return to refuel amid Red Sea rerouting, trade sources said.

The decline was in line with a drop in vessel calls for bunkering, which slipped to a year’s low of 3,359 calls, while monthly container throughput was also at its lowest since last February, hitting 3.17 million 20-foot equivalent units (TEUs)

Meanwhile, monthly LNG bunker sales exceeded biofuel sales for the first time ever since Singapore’s port authority started publishing sales figures for alternative bunker fuels.

INVENTORY DATA

– Singapore inventories climbed 11.4% to 21.33 million barrels (3.36 million metric tons) in the week to March 13, latest data from Enterprise Singapore showed.

OTHER NEWS

– Oil climbed on Thursday, supported by strong demand in the U.S. after gasoline stocks hit a three month low and crude stockpiles dropped unexpectedly, with supply concerns remaining after Ukrainian attacks on Russian refineries.

– Russian supertanker Nellis, hit by sanctions, arrived at the Chinese port of Dongjiakou in eastern Shandong province on Thursday to discharge crude oil, LSEG shipping data showed.

– With more ships heading around the Cape of Good Hope due to attacks in the Red Sea region and a shutdown in their main South African bunkering operations, Mercuria and Trafigura have started refuelling services in Mauritius, four sources said.

– Contracts have been awarded for the acquisition of 3.25 million barrels of oil for the Strategic Petroleum Reserve, the U.S. Energy Department said on Wednesday.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Sonia Cheema)