Asia Fuel Oil: VLSFO cash discount widens
Battered by ample supply and sluggish demand, Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash differential dropped to a more than nine-month low on Friday, extending losses this week.
The VLSFO cash differential fell to minus $2.85 a tonne to Singapore quotes, down from minus $2.35 a tonne in the previous session and from plus 35 cents a tonne at the start of the month.
Meanwhile, residual fuel inventories at the Amsterdam-Rotterdam-Antwerp (ARA) and Singapore storage hubs fell this week, while those in Fujairah fell, official data showed.
Fuel oil stocks in the ARA refining and storage fell 4%, or 51,000 tonnes, to a five-month low of 1.21 million tonnes in the week ended May 20, data from Dutch consultancy Insights Global (IG) showed.
Compared with last year, the inventories at the ARA hub were 30% lower and slightly below the five-year seasonal average of 1.28 million tonnes.
In Singapore, fuel oil inventories fell 5% to a three-week low of 24.96 million barrels, or 3.93 million tonnes, as net import volumes fell to a 2021 low.
At the start of the month, Singapore fuel oil stocks hit a more than four-year high of 27.23 million barrels, or 4.29 million tonnes.
In the Fujairah hub, fuel oil stockpiles were 4% higher to an two-week high of 13.05 million barrels, or 2.14 million tonnes, despite elevated exports.
Marine fuel sales volumes in the United Arab Emirates’ (UAE) marine refuelling and oil storage hub of Fujairah climbed 7% in April to just over 674,000 cubic meters, data from S&P Global Platts showed.
While the April volumes were higher, Fujairah has so far largely failed to recapture bunkering traffic from Qatari vessels, trade sources said, since the UAE re-opened its land, sea and air entry points with Qatar earlier this year.
Qatar, whose fleet of liquefied natural gas (LNG) tankers consumes about 150,000 to 170,000 tonnes of bunkers per month, managed to establish its own bunkering facilities after the UAE and other countries in the region severed relations with it in mid-2017.
The higher volumes came amid better-than-expected demand during the month, trade sources said.
The share of low-sulphur sales, totalling 561,000 cubic meters, to overall bunker volumes were 83% in April, compared with 80% in March, Reuters calculations showed.
380-cst high-sulphur fuel oil (HSFO) sales dropped 10% in April to 113,000 cubic meters while sales of 380-cst VLSFO jumped 11% to 532,000 cubic meters, the second highest on record.