SINGAPORE, Feb 13 (Reuters) - Asia's very low sulphur fuel oil (VLSFO) market recovered into a mild backwardation for the prompt months on Friday, after holding in contango since the start of February.
The market has been weighed by a supply outlook that appears to be broadly ample, even as tighter barging availability lifted marine fuel premiums earlier in the month.
Cash differentials continued to hold in discounts into March, though this narrowed slightly on Friday.
Meanwhile, high sulphur fuel oil (HSFO) differentials extended gains, even though the market structure has softened this week.
Amid the slight recovery in VLSFO, the hi-5, which reflects VLSFO's premium over the price of 380-cst HSFO, rebounded week-on-week to about $50 a metric ton as of Friday's Asia close, prompt-month data by LSEG showed. FO05-380SGMc1
Cracks firmed on Friday, with 380-cst HSFO FO380BRTCKMc1 closing at a discount near $2.35 a barrel, while VLSFO LFO05SGBRTCMc1 rose to a premium of about $5.25 a barrel.
INVENTORY DATA
- ARA fuel oil inventories STK-FO-ARA fell 10.8% to 1.03 million tons in the week to February 1, based on data from Dutch consultancy Insights Global.
OTHER NEWS
- Oil prices slipped on Friday and were on track for a second weekly decline on receding concerns of a U.S.-Iran conflict that could affect supply. O/R
- The United States has issued a general licence to India's Reliance Industries Ltd that will allow the refiner to buy Venezuelan oil directly without violating sanctions, two sources familiar with the matter said.
- Venezuela's state-run PDVSA is in talks with many of its joint-venture partners, including Chevron, Repsol and Maurel & Prom, to offer them expansions to the oilfields already assigned to their projects, sources with knowledge of the matter said, a move that could contribute to increased crude and gas output.
- The shipping industry's biggest players are shrugging off Trump administration opposition to a global carbon price and are forging ahead with billions of dollars in emissions-reducing investments, according to company officials and a Reuters analysis of data.
WINDOW TRADES O/AS
- 180-cst HSFO: No trade
- 380-cst HSFO: No trade
- 0.5% VLSFO: No trade
ASSESSMENTS
FUEL OIL | ||||
CASH ($/T) | ASIA CLOSE | CHANGE | PREV CLOSE | RIC |
Cargo - 0.5% VLSFO | 456.39 | -11.50 | 467.89 | MFO05-SIN |
Diff - 0.5% VLSFO | -0.95 | 0.30 | -1.25 | MFO05-SIN-DIF |
Cargo - 180cst | 430.78 | -7.35 | 438.13 | FO180-SIN |
Diff - 180cst | 13.00 | 0.50 | 12.50 | FO180-SIN-DIF |
Cargo - 380cst | 430.67 | -5.87 | 436.54 | FO380-SIN |
Diff - 380cst | 16.05 | 1.00 | 15.05 | FO380-SIN-DIF |
Bunker (Ex-wharf) Premium - 380cst | 2.50 | 0.50 | 2.00 | |
Bunker (Ex-wharf) Premium - 0.5% VLSFO | 3.50 | 0.00 | 3.50 |
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 Jeslyn Lerh;)
((jeslyn.lerh@thomsonreuters.com))