VLSFO differential trades at parity; inventories log sharp build
Asia's spot differential for very low sulphur fuel oil (VLSFO) traded at parity to cargo quotes on Thursday, diminishing its premiums, while onshore inventories at Singapore rose sharply.
Stockpiles breached 26 million barrels in the week to August 6, latest data showed, as some sellers struggled to clear stocks in lukewarm demand and plentiful supply.
A jump in supply arrivals last month contributed to the firmer stockbuild, while volumes this month are expected to ease just slightly, according to analysts.
The ample inventory situation has capped markets from recovering. Singapore VLSFO cash differential was pegged near parity to cargo quotes on Thursday, following a weaker trade.
High sulphur fuel oil (HSFO) showed some signs of rebounding in the derivatives market, with cracks trading higher day-on-day, even as spot fundamentals remained weak.
Singapore 380-cst HSFO/Dubai crack closed at a discount of $2.80 a barrel, while VLSFO crack was also slightly higher, closing at a premium near $9.60 a barrel, data from LSEG showed on Thursday.
INVENTORY DATA
- Singapore residual fuel inventories (STKRS-SIN) rose 6.7% to 26.32 million barrels (4.14 million metric tons) in the week to August 6, according to Enterprise Singapore.
OTHER NEWS
- Oil prices rose on Thursday amid signs of steady demand in the United States, although concerns over the economic impact of U.S. tariffs capped gains.
- Saudi Arabia, the world's biggest oil exporter, on Wednesday hiked its September crude oil prices for Asian buyers, the second monthly rise in a row.
- Russia-backed private refiner Nayara Energy, which was sanctioned by the European Union last month, has sought help from India's shipping ministry to get vessels for the movement of its refined fuels, a government source said on Thursday.
- Dubai-based oil trader 2Rivers, formerly known as Coral Energy, has started the formal process of dissolution following sanctions by Britain and the European Union, the company said on Wednesday.
WINDOW TRADES
- 180-cst HSFO: No trade
- 380-cst HSFO: No trade
- 0.5% VLSFO: One trade
ASSESSMENTS
FUEL OIL | ||||
CASH ($/T) | ASIA CLOSE | CHANGE | PREV CLOSE | RIC |
Cargo - 0.5% VLSFO | 488.15 | -6.97 | 495.11 | (MFO05-SIN) |
Diff - 0.5% VLSFO | 0.05 | -0.25 | 0.30 | (MFO05-SIN-DIF) |
Cargo - 180cst | 413.84 | -3.96 | 417.80 | (FO180-SIN) |
Diff - 180cst | -3.85 | 0.60 | -4.45 | (FO180-SIN-DIF) |
Cargo - 380cst | 402.93 | -3.89 | 406.83 | (FO380-SIN) |
Diff - 380cst | -5.35 | -0.30 | -5.05 | (FO380-SIN-DIF) |
Bunker (Ex-wharf) Premium - 380cst | 0.50 | -0.50 | 1.00 | |
Bunker (Ex-wharf) Premium - 0.5% VLSFO | 5.00 | 0.00 | 5.00 |
For a list of derivatives prices, please refer to ENSWAP/INFO or the RICs below: | |
180cst M1 | (FO180SGSWMc1) |
180cst M1/M2 | (FO180SGSDMc1) |
380cst M1 | (FO380SGSWMc1) |
380cst M1/M2 | (FO380SGSDMc1) |
0.5% VLSFO M1 | (LFO05FSGMc1) |
0.5% VLSFO M1/M2 | (LFO05FSGSMc1) |
Cracks 180cst-Brent M1 | (FO180BRTCKMc1) |
Cracks 180cst-Dubai M1 | (FO180SGCKMc1) |
Cracks 380cst-Brent M1 | (FO380BRTCKMc1) |
Cracks 380cst-Dubai M1 | (FO380DUBCKMc1) |
Cracks 0.5% VLSFO-Brent M1 | (LFO05SGBRTCMc1) |
Cracks 0.5% VLSFO-Dubai M1 | (LFO05SGDUBCMc1) |
Visco 180cst/380cst M1 | (FOVISSGDFMc1) |
Hi-5 0.5% VLSFO/380cst M1 | (FO05-380SGMc1) |
GoFo 10PPM/0.5% VLSFO M1 | (GO10FO05FSGMc1) |
East-West M1 | (FOSGEWMc1) |
Barges M1 | (HFOFARAAMc1) |
Barges M1/M2 | (HFOFARAASMc1) |
Crack Barges-Brent M1 | (HFOFARAACMc1) |
