Asia Fuel Oil-Spot 380-cst HSFO slips for first in two weeks despite margins rebound
SINGAPORE, Nov 5 (Reuters) -Asia's cash premiums for 380-cst high sulphur fuel oil (HSFO) fell for the first time in slightly more than two weeks, reflecting a steady number of offers on window and overall narrower paper swaps backwardation, though margins rebounded.
However, traders say there is still strength in the market given the expectation of minimal import arrivals to Singapore for November, one China-based trade source said.
Meanwhile, refining margins for 380-cst HSFO recovered by 50 cents a barrel to a $7-a barrel discount after dipping to a one-month low in the previous trading session.
The weakening of refining margins in the past few trading sessions was a spillover from softer performance in the Europe markets, a second trade source said.
Cash and time spreads in the paper markets are both likely to remain supported in the short term, though some traders will start looking at December swing supplier arrivals, given the narrowing east-west price difference, the source added.
November arrivals of HSFO cargoes into Singapore are likely down by 30-40% month on month, some shiptracking data from two traders showed.
Meantime, for very low sulphur fuel oil (VLSFO) markets, markets were questioning China's real spot demand on the bunkering front as Singapore stockpiles were likely to remain sufficient.
Given the lack of export quotas, majors would end up having to buy and replenish their requirements outside of China and they do not have to buy it from Singapore per se, given the ready offers from refiners who were earlier having downstream unit troubles, two traders said, adding that this could still buoy demand and prices.
The Hi-5 spread FO05-380SGMc1 continued to trade sideways, closing at around $127 per ton, reflecting the lack of clarity on demand for VLSFO despite strong HSFO market fundamentals.
INVENTORIES
- U.S. crude oil stockpiles likely rose last week, while distillate and gasoline inventories were seen down, a preliminary Reuters poll showed on Monday. EIA/S
OTHER NEWS
- Iran has approved a plan to increase oil production by 250,000 barrels per day, the oil ministry's news website Shana reported on Monday.
- Libya's oil production is nearing 1.5 million barrels per day, the country's National Oil Corporation (NOC)said in a post on X on Monday.
- OPEC oil output rebounded in October from its lowest this year the previous month as Libya resolved a political crisis, a Reuters survey found, although a further Iraqi effort to meet its cuts pledged to the wider OPEC+ alliance limited the gain.
- French oil major TotalEnergies predicts global oil demand will peak after 2030 in its two most likely energy transition scenarios, neither of which will limit global warming to 2 degrees Celsius in line with the Paris Climate agreement, it said in its annual energy outlook report on Monday.
- India's state-run Hindustan Petroleum Corp Ltd HPCL.NS is looking at raising its annual crude import deal with Iraq to 100,000 barrels per day (bpd) in 2025, a growth of about 43% from this year, a company source said.
WINDOW TRADES O/AS
- 180-cst HSFO: One deal
- 380-cst HSFO: Two deals
- 0.5% VLSFO: No deal
ASSESSMENTS
FUEL OIL | ||||
CASH ($/T) | ASIA CLOSE | CHANGE | PREV CLOSE | RIC |
Cargo - 0.5% VLSFO | 572.43 | 5.30 | 567.13 | MFO05-SIN |
Diff - 0.5% VLSFO | 10.50 | -0.59 | 11.09 | MFO05-SIN-DIF |
Cargo - 180cst | 461.17 | 0.00 | 461.17 | FO180-SIN |
Diff - 180cst | 16.00 | -0.84 | 16.84 | FO180-SIN-DIF |
Cargo - 380cst | 448.83 | 4.01 | 444.82 | FO380-SIN |
Diff - 380cst | 13.00 | -1.72 | 14.72 | FO380-SIN-DIF |
Bunker (Ex-wharf) Premium - 380cst | 14.50 | -1.75 | 16.25 | |
Bunker (Ex-wharf) Premium - 0.5% VLSFO | 14.75 | -1.50 | 16.25 | |
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 |
Reporting by Trixie Yap; Editing by Tasim Zahid
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