Asia Fuel Oil-HSFO retains downside risk in ample supply

Reuters
02/25
Asia Fuel Oil-HSFO retains downside risk in ample supply

SINGAPORE, Feb 25 (Reuters) - Asia's high sulphur fuel oil (HSFO) market steadied on Wednesday after a recent pare-back, though downside risk still lingered amid expectations of ample supply.

The prompt March-April timespread for 380-cst HSFO widened to more than $2.50 a metric ton at the Asia close, compared with $1.30 a ton in the previous session.

Despite slight recovery in the market structure, spot benchmarks for HSFO remained under pressure as broader supply is set to remain ample into March. The 380-cst HSFO cash differential clung near to a one-month low as of Wednesday.

Meanwhile, very low sulphur fuel oil (VLSFO) was rangebound from the previous session, with the cash differential holding in a small premium.

In regional supplies, India's MRPL offered a cargo of VLSFO for March loading, based on market sources. FUEL/TENDA

VLSFO crack was stable at a premium near $5.85 a barrel, while the 380-cst HSFO crack FO380BRTCKMc1 inched up day-on-day at a discount near $5.30 a barrel, data from LSEG showed.

FUJAIRAH DATA

- Fujairah heavy fuel inventories FUJHD04 rose 3.1% to 7.87 million barrels (1.24 million tons) in the week to February 23, FOIZ data published by S&P Global Commodity Insights showed.

OTHER NEWS

- Oil prices were hovering near seven-month highs on Wednesday as the threat of military conflict between the U.S. and Iran that could disrupt supply continued to worry investors, with talks between the parties set for Thursday. O/R

- Russia's oil pipeline monopoly Transneft has cut crude intake into its system by some 250,000 barrels per day after a Ukrainian drone attack on a key pumping station serving major oil hubs and ports on Monday, two sources familiar with the situation said on Tuesday.

- Iraq could nearly double its output from West Qurna 2 oilfield to 800,000 barrels per day as Chevron enters exclusive talks to take over operations from Russia's Lukoil, Iraq's oil minister said on Wednesday.

- Tank storage group Vopak said on Wednesday it would return 1.7 billion euros ($2.0 billion) to shareholders over the next five years, after its profit surged 61% last year on the back of strong cash flow.

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

488.44

-1.59

490.03

MFO05-SIN

Diff - 0.5% VLSFO

1.75

-0.30

2.05

MFO05-SIN-DIF

Cargo - 180cst

426.56

7.85

418.71

FO180-SIN

Diff - 180cst

4.80

-0.70

5.50

FO180-SIN-DIF

Cargo - 380cst

420.32

8.29

412.02

FO380-SIN

Diff - 380cst

4.60

-0.25

4.85

FO380-SIN-DIF

Bunker (Ex-wharf) Premium - 380cst

2.50

0.00

2.50

Bunker (Ex-wharf) Premium - 0.5% VLSFO

4.00

0.00

4.00

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

(Reporting by Jeslyn Lerh; Editing by Devika Syamnath)

((jeslyn.lerh@thomsonreuters.com))

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