Cash differentials for high sulphur fuel oil (HSFO) in Asia have flipped from discounts into premiums as of Tuesday, reflecting a slight recovery in the market amid seasonal demand uptick, says an article published in Business Recorder.
Firm power utility demand
Differentials for 180-cst HSFO were at premiums of $1.08 per tonne to Singapore quotes on Tuesday, versus discounts since end-May, while 380cst-HSFO were at premiums of $2.86 per tonne to Singapore quotes on Tuesday.
Power utility demand firmed from the Middle East and South Asia as the regions entered peak summer. Nonetheless, ample supplies capped price gains.
Middle Eastern inflows to Asia breached 2 million tonnes in June, as with the previous months this year, Refinitiv Eikon data showed Tuesday.
Bunker premiums for HSFO at Singapore have also corrected back to levels seen earlier this year, easing from price spikes in March and April when fuel contamination issues buoyed premiums.
Double-digit premium
Ex-wharf bunker premiums for 380cst-HSFO have fallen to single digits over Singapore quotes in June, staying well below double-digit premiums in May, according to bunker fuel traders.
Meanwhile, cash differentials for 0.5% very low sulphur fuel oil (VLSFO) were at $58.96 per tonne to Singapore quotes on Tuesday, edging slightly lower from $61.36 per tonne on Monday.
Volatile price
Oil prices rose in volatile trade on Tuesday as tight global supplies outweighed worries that fuel demand would be hit by a possible recession and fresh COVID-19 curbs in China.
Russia rose to become India’s second-biggest oil supplier in May, pushing Saudi Arabia into third place but still behind Iraq which remains No. 1, data from trade sources showed. An Iran-flagged tanker carrying about 1 million barrels of crude from the Middle Eastern country arrived in Venezuelan waters over the weekend, according to a shipping document seen by Reuters on Monday.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Business Recorder
