- The Asian market for high sulfur fuel oil (HSFO) experiences an unexpected consecutive surge in prices, driven by speculation over increased demand from China following additional import quotas.
- OPEC+ plans a meeting in early February. Shipping companies, including Maersk and Hapag-Lloyd, avoided the Red Sea route to the Suez Canal after an attack. India’s ONGC Videsh reaches an agreement with Venezuela for oil in exchange for pending dividends.
- Global oil prices surge due to Israel-Hamas tension. Major companies reroute shipments around the Red Sea, impacting costs and delivery times. Despite regional conflicts, the global supply chain remains resilient, adapting to shifts in global trade and tensions.
Improved Refining Margins For HSFO
In an unexpected turn, the market for high-sulfur fuel oil (HSFO) in Asia has seen a consecutive surge in prices for the second session on Wednesday. This increase is driven by speculation over an anticipated spike in demand from China, following an announcement regarding the release of additional import quotas.
The 380-cst HSFO cash premium in Singapore rose to a remarkable $10 per metric ton, with trading volumes noticeably higher for the latter half of January. Despite ongoing regional tensions, particularly in the Red Sea, Russian fuel supplies to Asia remain unhampered, witnessing no significant disruptions.
Refining margins for 380-cst HSFO also improved, with discounts nearly narrowing to $8.50 per barrel. While the HSFO market flourishes, the low-sulfur fuel oil market experiences a softening. The cash premium fell to $5 per metric ton, and the refining cracks for February dropped to premiums of around $13 per barrel.
Fujairah Inventory Decline And Market Stability
In Fujairah, inventory levels decreased by 1.9% to 9.95 million barrels in the week leading up to January 1st, according to data from S&P Global Commodity Insights. Oil prices remained relatively stable on Wednesday following volatile movements earlier in the week. Market participants are juggling concerns about the U.S. economy with the potential for supply disruptions due to tensions in the Red Sea.
OPEC+ is expected to convene for a meeting in early February, with the exact date yet to be determined. Shipping companies, including Denmark’s Maersk and Germany’s Hapag-Lloyd, have announced their intentions to avoid the Red Sea route to the Suez Canal following an attack on a Maersk vessel. India’s ONGC Videsh has reached an agreement with Venezuela to receive oil in exchange for the company’s pending dividend from a project in Venezuela, as stated by India’s oil secretary.
Oil Price Surge Amid Regional Tensions
Global oil prices surged and markets took a slight hit due to escalating tension between Israel and Hamas. Major companies are rerouting shipments around the Red Sea due to security incidents and Iran’s deployment of a warship. This strategic move increases costs and extends delivery times for various goods.
While the conflict persists, the global supply chain remains resilient, adapting to the shifting landscape of global trade and regional tensions.
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Source: Bnn Breaking
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