HSFO down for fifth session; Singapore stocks remain high

Asia’s spot premium for high sulphur fuel oil (HSFO) softened for a fifth consecutive session on Thursday, while onshore residue stocks at Singapore held high.

Cash premiums for spot 380-cst HSFO fell to $3.55 per metric ton, with a lower-priced trade emerging for the product, although inter-month spreads rebounded from the previous session.

In contrast, the very low sulphur fuel oil (VLSFO) market firmed slightly, but the uptick was capped due to largely bearish fundamentals.

Inventories have been holding above typical averages for a fourth straight week, official data showed on Thursday.

Most of the imports originated from Brazil and Indonesia in the latest week, while exports mostly headed for South Korea and China, based on the data.

INVENTORY DATA

– Singapore onshore fuel oil stockpiles (STKRS-SIN) were at 21.10 million barrels (3.32 million tons) in the week to Jan. 8, climbing 0.7% from the previous week, Enterprise Singapore data showed.

OTHER NEWS

– Oil prices were little changed on Thursday, with investors weighing firm winter fuel demand expectations against large builds of fuel inventories in the U.S., the world’s biggest oil user, and macroeconomic concerns.

– Saudi Arabia’s crude oil supply to China is set to decline in February from the month before, trade sources said on Thursday, after the kingdom hiked its prices and as OPEC+ extended production cuts in the first quarter.

– Global energy major BP has pledged to lift oil production by 44% and gas output by 89% from India’s largest field off its west coast, under a decade-long contract, according to block operator Oil and Natural Gas Corp ONGC.NS on Thursday.

– Indonesia said on Thursday its exports of used cooking oil and palm oil residue in recent years had exceeded production capacity, indicating crude palm oil had been mixed in and prompting it to issue regulation curbing shipments this week.

WINDOW TRADES

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