off-the-wire

Asia Fuel Oil-Hi-5 fuel oil spread crunches to near 11-month lows

Kitco Media
By Reuters
Published:
Updated:
Reuters
SINGAPORE, March 3 (Reuters) - Asia's hi-5 fuel oil spread narrowed to nearly 11-month lows on Friday, as market trends continued to diverge for very low sulphur fuel oil (VLSFO) and high sulphur fuel oil (HSFO). The front-month Hi-5, which is the price difference between 0.5% VLSFO and 380-cst HSFO, narrowed to $143.25 a tonne at the Asia close (0830 GMT), Refinitiv data showed. The spot VLSFO market has softened steadily since early February, driven by higher incoming supplies and tepid downstream demand for bunkering. The 0.5% VLSFO cash differential slumped for a 12th consecutive session, closing at parity to Singapore quotes on Friday. The differential has always held in premiums since end-May 2021, data showed. Meanwhile, HSFO retained a rally amid strong bidding. The 180-cst HSFO cash differential climbed to $9 a tonne over Singapore quotes, while the 380-cst HSFO cash differential firmed to $8.84 a tonne. Refining margins for HSFO posted weekly gains of nearly 25%, Refinitiv data showed. In contrast, 0.5% VLSFO cracks fell by more than 7%.


ARA INVENTORIES Fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell 3% to 1.14 million tonnes in the week ended March 2, latest data from Dutch consultancy Insights Global showed.


OTHER NEWS - Oil prices held steady on Friday, poised for a weekly gain as renewed optimism on China's demand recovery overrode recession worries brought by growing crude inventories in the U.S. and tightening monetary policy in Europe. - The United States imposed sanctions on firms it said had transported or sold Iranian petroleum or petrochemical products in violation of U.S. restrictions, including two companies based in China. - State oil giant Abu Dhabi National Oil Co (ADNOC) on Friday set the final price for its initial public offering, valuing the company at about $50 billion after drawing record demand. It will become Abu Dhabi's largest listed company. - Russian oil producer Lukoil has started ship-to-ship (STS) loadings of ultra-low-sulphur diesel (ULSD) off its western exclave of Kaliningrad, according to traders and Refinitiv data. A full EU embargo on Russian oil products went into effect on Feb. 5 and traders have since rerouted diesel exports to Africa and Asia, as well as used STS transfers.


WINDOW TRADES - 180-cst HSFO: One trade - 380-cst HSFO: Two trades - 0.5% VLSFO: Two trades


ASSESSMENTS
FUEL OIL
CASH ($/T) ASIA CLOSE CHANGE PREV CLOSE RIC Cargo - 0.5% VLSFO 578.04 -6.70 584.74 Diff - 0.5% VLSFO 0.00 -3.05 3.05 Cargo - 180cst 468.30 5.14 463.16 Diff - 180cst 9.00 1.52 7.48 Cargo - 380cst 445.30 7.57 437.73 Diff - 380cst 8.84 1.34 7.50 Bunker (Ex-wharf) Premium - 380cst 12.00 2.00 10.00
Bunker (Ex-wharf) Premium - 0.5% VLSFO 8.00 -1.00 9.00
For a list of derivatives prices, including margins, please double click the RICs below. Brent M1 180cst M1 180cst M1/M2 180cst M2 Visco M1 Visco M2 380cst M1 380cst M1/M2 380cst M2 Cracks 180-Dubai M1 Cracks 180-Dubai M2 East-West M1 East-West M2 Barges M1 Barges M1/M2 Barges M2 Crack Barges-Brent M1 Crack Barges-Brent M2 (Reporting by Jeslyn Lerh; Editing by Varun H K)

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