Spot differentials for fuel oil markets were little changed on Friday in Asia as pre-Diwali holiday trade was thin, while some trade sources said supply outlook was slightly towards the year-end for high sulphur fuel oil (HSFO).

The markets have been largely weighed by ample prompt supply, with the differentials holding steadily in discounts towards the end of the week.

However, perspectives for HSFO’s supply outlook were mixed into the year-end. Some traders said that it will tighten slightly due to slower Russian exports, while others said that the broader market remains flooded by Middle Eastern barrels.

Meanwhile, Singapore’s cash differential for very low sulphur fuel oil (VLSFO) held stable at a discount of $2.75 a metric ton. Supply of this fuel oil grade remained plentiful, though bunker premiums inched slightly higher this week as more prompt buying emerged mid-week, some trade sources said.

Cracks were broadly steady, with the November VLSFO crack (LFO05SGBRTCMc1) hovering above a premium of $6 a barrel, while 380-cst HSFO crack (FO380BRTCKMc1) held at a discount close to $4 a barrel, data compiled by LSEG showed.

INVENTORY DATA

– ARA fuel oil inventories (STK-FO-ARA) rose 4.3% to 0.97 million tons in the week to October 16, based on data from Dutch consultancy Insights Global.

OTHER NEWS

– Oil prices edged lower on Friday, heading for a weekly loss, with uncertainty over global energy supplies after U.S. President Donald Trump and Russian President Vladimir Putin agreed to meet to discuss ending the war in Ukraine.
– Western powers have ramped up pressure on Russia’s oil sales amid its war with Ukraine as U.S. President Donald Trump said India would stop buying and Britain imposed sanctions on top Russian oil firms.

– Turkey is set to maintain its imports of Russian Urals crude oil in October at around 280,000 barrels per day (bpd), unchanged from September, according to LSEG shipping data and market sources.
– U.S. crude stocks rose more than expected last week as refining crude runs dropped sharply to their lowest in more than a year and a half, data from the Energy Information Administration showed.

WINDOW TRADES

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