Asia Fuel Oil-VLSFO cracks jump; China issues third batch of export quotas
SINGAPORE, Sept 20 (Reuters) -Cracks for very low sulphur fuel oil (VLSFO) gained on Friday even as spot premiums were largely rangebound, while the market eyed China's new oil export quotas in a third batch for 2024.
The quotas comprised 8 million metric tons of clean refined fuel and 1 million tons of marine fuel, based on Chinese commodities consultancies and trade sources.
The marine fuel export quota for the third batch was below market expectations of 2 million to 3 million tons, which could mean less domestic supply available for bunkering in China and may lead to more inflows from Singapore.
However, the lower volume was unlikely to have a sustained impact on market prices as China's bunker sales volumes have dropped so far in 2024 compared with 2023.
Export volume for bunkering totalled 1.46 million tons in August, hitting five-month lows, customs data showed on Friday.
Meanwhile, imports of fuel oil rebounded to three-month highs in August, totalling 1.90 million tons.
A looming tax revamp could have driven some refiners to pick up more barrels ahead of its implementation, while a softer high sulphur fuel oil market in August also spurred buying interest, market sources said.
Refining cracks climbed on Friday, with the October VLSFO/Dubai contract closing higher at premiums above $13.50 per barrel, showed LSEG data.
INVENTORY DATA
- ARA inventories STK-FO-ARA inched down 1.7% to 1.24 million tons in the week to Sept. 19, data from Dutch consultancy Insights Global showed. Weekly inventories averaged lower in September so far, compared to August.
OTHER NEWS
- Oil prices eased on Friday, but were on track to register gains for a second straight week following a large cut in U.S. interest rates and declining global stockpiles. O/R
- China's crude oil imports from Malaysia surged 31% in August from a year earlier, making it the country's second-largest supplier after Russia, customs data showed, bucking a broader trend of slowing Chinese imports.
- India has discussed raising oil imports from Brazil in a meeting with the head of the South American nation's state-run oil giant Petrobras, India's oil minister said on Friday.
- The shipping unit of Indonesia's state energy firm Pertamina plans to double its fleet of 320 tankers in the next 10 years, the unit's CEO Yoki Firnandi told the Gastech conference in Houston.
WINDOW TRADES O/AS
- 180-cst HSFO: No trade
- 380-cst HSFO: No trade
- 0.5% VLSFO: One trade
ASSESSMENTS
FUEL OIL | ||||
CASH ($/T) | ASIA CLOSE | CHANGE | PREV CLOSE | RIC |
Cargo - 0.5% VLSFO | 572.00 | 15.10 | 556.90 | MFO05-SIN |
Diff - 0.5% VLSFO | 15.25 | -0.96 | 16.21 | MFO05-SIN-DIF |
Cargo - 180cst | 451.37 | 9.09 | 442.28 | FO180-SIN |
Diff - 180cst | 18.85 | 1.98 | 16.88 | FO180-SIN-DIF |
Cargo - 380cst | 436.95 | 6.83 | 430.12 | FO380-SIN |
Diff - 380cst | 17.50 | 0.42 | 17.08 | FO380-SIN-DIF |
Bunker (Ex-wharf) Premium - 380cst | 14.00 | 1.00 | 13.00 | |
Bunker (Ex-wharf) Premium - 0.5% VLSFO | 21.00 | -1.50 | 22.50 |
For a list of derivatives prices, including margins, please double click the RICs below. | |
Brent M1 | BRENTSGMc1 |
180cst M1 | FO180SGSWMc1 |
180cst M1/M2 | FO180SGSDMc1 |
180cst M2 | FO180SGSWMc2 |
Visco M1 | FOVISSGDFMc1 |
Visco M2 | FOVISSGDFMc2 |
380cst M1 | FO380SGSWMc1 |
380cst M1/M2 | FO380SGSDMc1 |
380cst M2 | FO380SGSWMc2 |
Cracks 180-Dubai M1 | FO180SGCKMc1 |
Cracks 180-Dubai M2 | FO180SGCKMc2 |
East-West M1 | FOSGEWMc1 |
East-West M2 | FOSGEWMc2 |
Barges M1 | HFOFARAAMc1 |
Barges M1/M2 | HFOFARAASMc1 |
Barges M2 | HFOFARAAMc2 |
Crack Barges-Brent M1 | HFOFARAACMc1 |
Crack Barges-Brent M2 | HFOFARAACMc2 |
Reporting by Jeslyn Lerh; Editing by Shreya Biswas
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.