Asia’s prompt hi-5 fuel oil spread narrowed by more than 10% week-on-week, after the high sulphur fuel oil (HSFO) market found some uplift in recent sessions, while very low-sulphur fuel oil (VLSFO) was broadly stable.

The January hi-5, which reflects VLSFO’s premium over the price of 380-cst HSFO for that month, closed at $69 a metric ton on Friday, compared to premiums nearer to $80 last week, based on LSEG data. (FO05-380SGMc1)

Singapore’s 380-cst HSFO market logged some recovery this week, with spot bids inching higher day-on-day, though some selling interest continued to cap further upside. The market remained trapped in discounts on ample prompt supply.

Meanwhile, the VLSFO market has been steady this week amid rangebound bids and offers, though the front-month contango widened on Friday.

Fuel oil cracks fell from the previous day, though HSFO (FO380BRTCKMc1) posted weekly gains, closing at a discount of around $6 a barrel, while VLSFO crack (LFO05SGBRTCMc1) ended the session at a premium near $4.25 a barrel.

INVENTORY DATA
– ARA fuel oil inventories (STK-FO-ARA) inched up 0.2% to 1.14 million tons in the week to December 18, based on data from Dutch consultancy Insights Global.

OTHER NEWS
– Oil prices ticked down on Friday and were set to close lower for a second straight week, as rising prospects of a Russia-Ukraine peace deal offset concerns over supply disruptions from a blockade of Venezuelan oil tankers.
– Venezuela authorized two very large crude carriers to set sail for China, according to two sources familiar with Venezuela’s oil export operations, which would be only the second and third supertankers to depart the country since the U.S. seized a ship carrying Venezuelan oil last week.
– The European Union imposed sanctions on 41 more ships in Russia’s shadow fleet, taking the total of designated vessels to almost 600.
– Britain imposed sanctions on more Russian oil companies and Canadian-Pakistani billionaire Murtaza Lakhani as part of efforts to ramp up pressure on Moscow over the war in Ukraine.

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