Asia’s hi-5 fuel oil spread narrowed to a five-week low on Friday, as the very low-sulphur fuel oil (VLSFO) market remained under pressure in recent sessions while high sulphur fuel oil (HSFO) showed some recovery.

The hi-5, which reflects VLSFO’s premium over the price of 380-cst HSFO, fell to $72.85 a metric ton, according to prompt-month data compiled by LSEG at the Asia close. (FO05-380SGMc1)

Singapore’s spot differential for VLSFO inched back into a discount on Friday, with offers dipping to parity over cargo quotes as prompt markets remain amply supplied.

Meanwhile, 380-cst HSFO saw bids edging higher day-on-day, though there was still competitive selling interest so that limited gains.
Cracks bounced slightly higher day-on-day. VLSFO’s crack (LFO05SGBRTCMc1) was steady to firmer at a premium of about $3.70 a barrel, while 380-cst HSFO’s crack (FO380BRTCKMc1) rose to a discount near $7.75 a barrel, data compiled by LSEG showed.

INVENTORY DATA

– ARA fuel oil inventories (STK-FO-ARA) rose 1.5% to 1.03 million tons in the week to December 4, based on data from Dutch consultancy Insights Global.

OTHER NEWS

– WTI oil prices were poised for a weekly gain on Friday, supported by an expected Federal Reserve interest rate cut, escalating U.S.-Venezuela tensions and stalled peace talks in Moscow, though both oil benchmarks dipped from the previous day.
– Chinese independent refiners are buying discounted Iranian crude held in onshore storage tanks using newly issued import quota to swiftly raise their output, trade sources and analysts said, easing a supply glut.
– State refiners Indian Oil Corp and Bharat Petroleum Corp have placed January orders for the loading of Russian oil from non-sanctioned suppliers due to widening discounts, trade sources with knowledge of the matter said.
– A vessel located 15 nautical miles west of Yemen reported an exchange of fire after sighting about 15 small craft at a range of 1–2 cables, the United Kingdom Maritime Trade Operations agency said on Friday.

WINDOW TRADES

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