Asia’s spot market differentials for key fuel oil grades closed in range-bound discounts from the previous session, with several trades emerging for 380-cst high sulphur fuel oil (HSFO) at similar values from the previous day.

Active trading prevailed on Friday for the 380-cst grade at discounts of $6 per metric ton to cargo quotes. Meanwhile, 180-cst grade was offered at much steeper discounts from a floating storage.

High supply inventories in the Asia region have been putting a lid on fuel oil markets.

However, the very low sulphur fuel oil (VLSFO) market logged a bit of recovery at the end of the week, with spot discounts narrowing to near $1 a ton. Market structure remained in contango for the prompt months.

Fuel oil cracks were range-bound from the previous day. The VLSFO crack for December held above a premium of $7 a barrel, while 380-cst HSFO crack was broadly stable at a discount near $5 a barrel, showed data compiled by LSEG.

INVENTORY DATA

– ARA fuel oil inventories rose 15.3% to 1.06 million tons in the week to November 6, based on data from Dutch consultancy Insights Global.

OTHER NEWS

– Oil prices rose on Friday but remained on track for a second consecutive weekly loss after three days of declines on worries about excess supply and slowing U.S. demand.

– Russia’s oil exports from western ports are expected to decrease slightly in November amid higher refinery runs, yet remain close to the record highs recorded over recent months, according to shipping and trading sources and estimates from Reuters.

– The volume of oil stored onboard ships in Asian waters doubled in recent weeks after tightening western sanctions hit imports from China and India and as a shortage of import quota curbed demand from independent Chinese refiners, analysts said.

– Gunvor said it has withdrawn its proposal to buy foreign assets of Russian energy company Lukoil after the U.S. Treasury called it Russia’s “puppet” and signaled Washington opposed the deal.

WINDOW TRADES

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