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Asia Fuel Oil: Premiums rangebound; inventories at four-week high

Spot fuel oil premiums were little changed on Thursday, while onshore inventories at Singapore edged up to a four-week high.

Inventories have been holding above average levels, with most recent data showing volumes above 21 million barrels.

Most of the week’s imports came from Brazil, Saudi Arabia and Russia, while majority of exports were headed to China, latest data showed.

The market remained cautious about the supply outlook as with previous sessions.

Singapore cash premiums for high sulphur fuel oil (HSFO) rose slightly on Thursday amid a wider backwardation, while very low sulphur fuel oil (VLSFO) inched down as offers eased for loading dates into the second half of February.

Meanwhile, cracks climbed on Thursday due to lower crude prices. Singapore 380-cst HSFO crack (FO380BRTCKMc1) closed higher at a discount near $2.55 a barrel, while VLSFO crack (LFO05SGBRTCMc1) closed at a premium near $11 a barrel.

Separately, Thailand’s PTT offered VLSFO for loading in February via a tender that closes on Friday, based on industry sources.

INVENTORY DATA

– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 21.11 million barrels (3.32 million tons) in the week to Jan. 22, up 1.7% week-on-week, Enterprise Singapore data showed.

OTHER NEWS

– Oil prices dipped on Thursday, extending losses amid uncertainty over how U.S. President Donald Trump’s proposed tariffs and energy policies would impact global economic growth and energy demand.

– Saudi Arabia’s state oil company Aramco bought its first cargo of WTI Midland, a U.S. crude oil grade that underpins the global Brent benchmark, oil-index publisher S&P Global Commodity Insights said.

– Australia’s Ampol estimated a steep drop in annual earnings as production at its Lytton refinery in Queensland was hit by operational constraints and lower refining margins.

– LyondellBasell Industries will begin the permanent closure of its 263,776 barrel-per-day Houston refinery this coming weekend, said people familiar with plant operations.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters

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