Asia Fuel Oil-Spot premiums broadly stable after recent declines

Spot premiums for fuel oil were largely unchanged on Monday amid a backdrop of thin trade, steadying after recent declines.

Bids held steady-to-higher for both high-sulphur (HSFO) and low-sulphur (VLSFO) grades, though gains remain capped by expectations of subsequently firmer supply arrivals.

The cash premium for Singapore 380-cst HSFO was pegged at $10.85 a metric ton on Monday, though 180-cst HSFO slipped to $7.65 a ton as offers softened.

VLSFO held largely stable from the previous session at about $9 a ton, though market backwardation narrowed at the prompt months.

Meanwhile, cracks for December contracts closed higher, with VLSFO LFO05SGDUBCMc1 at premiums of about $12.85 a barrel and 380-cst HSFO FO380DUBCKMc1 inching towards discounts of about $5.25 a barrel, based on LSEG’s data at 0830 GMT.

REFINERY UPDATES

– More than a quarter of U.S. Gulf of Mexico oil and 16% of natural gas output remained offline in the aftermath of storm Rafael, the U.S. offshore energy regulator reported on Sunday.

OTHER NEWS

– Oil prices were little changed on Monday as the threat of supply disruptions from a U.S. storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.

– Saudi Arabia’s crude oil supply to China is set to fall to about 36.5 million barrels in December, trade sources said on Monday, on weak demand from the world’s largest importer.

– The Biden administration said it has bought its last batch of oil for the Strategic Petroleum Reserve after selling a record amount from the facility in 2022 to counter fuel prices that had risen after Russia’s invasion of Ukraine.

– U.S. renewable fuel credits rose to multi-month highs on increased demand from refiners trying to comply with mandates and higher prices for soyoil, surprising traders who expected Donald Trump’s reelection as U.S. president to weigh on the market.

WINDOW TRADES O/AS

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