Asia spot fuel oil differentials held in steady discounts on Wednesday, weighed by a persistent backdrop of high supply.

Singapore’s very low sulphur fuel oil (VLSFO) cash differential continued to hold at discounts wider than $3 a metric ton, dragged by high inventory of blendstocks that added to the supply pool since the previous quarter.

Meanwhile, high sulphur fuel oil (HSFO) differentials also held in rangebound discounts, though market structure and timespreads improved slightly.

More arrivals of Middle Eastern cargoes to Asia are expected this month compared to the previous, as the exporting region had exited its summer demand season.

Asia’s October arrivals from the Middle East are set to breach 2 million tons, up about 10% from September, calculations based on LSEG ship-tracking data showed.

As for regional supply, Vietnam’s Nghi Son offered fuel oil for loading between October 23 and 25. The tender closes on Thursday, a notice on its website showed.

INVENTORY DATA

– Fujairah heavy fuel inventories (FUJHD04) rose 3.6% to 6.14 million barrels (0.97 million tons) in the week to October 13, FOIZ data published by S&P Global Commodity Insights showed.

OTHER NEWS

– Oil prices fell on Wednesday, extending losses from the previous session, as investors weighed the International Energy Agency’s warning of a supply surplus in 2026 and U.S.-China trade tensions that could curtail demand.
– Supertanker freight rates surged this week and are set to stay elevated on U.S.-China tit-for-tat hikes in port fees and concerns about the fallout from U.S. sanctions on a major Chinese crude oil terminal.
– An Indian-backed oil refinery in Mongolia is expected to begin operations in 2028, India’s foreign ministry said on Tuesday, adding that the Mongolian authorities also want Indian firms to explore for oil and gas in the country.
– Abu Dhabi state oil firm ADNOC is set to secure EU approval for its 14.7-billion-euro ($16.98 billion) bid for German chemicals company Covestro, with EU regulators likely to seek tweaks to remedies provided earlier this month, sources with direct knowledge of the matter said.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters