After falling over the previous four sessions, the very-low sulphur fuel oil (VLSFO) market in Asia stabilised on Thursday, as Singapore’s onshore stockpiles continued to decline and reached nine-month lows.
Stockpiles decline
As market backwardation extended, the premium for 0.5% VLSFO MFO05-SIN-DIF increased to $8.25 per tonne over Singapore quotes, while the front-month margin LFO05SGDUBCMc1 increased to a premium of $10.11 per barrel at 0830 GMT.
Weekly residual fuel oil inventories in Singapore have decreased for seven weeks running as a result of a decline in western arbitrage supplies in May with sustained Chinese purchases.
The market for high-sulfur fuel oil (HSFO) has not altered much during the past week. On Thursday, the 380-cst HSFO premium closed at $4.40 per tonne, while the FO380DUBCKMc1 front-month margin was trading at a discount of $8.79 per barrel.
SINGAPORE INVENTORIES O/SING1
According to data from Enterprise Singapore, onshore fuel oil stocks STKRS-SIN decreased to 17.49 million barrels (2.75 million tonnes) in the week of May 24. In August 2022, the weekly inventory level was last lower.
The weekly net imports of fuel oil, which are determined by deducting total exports from total imports, decreased by 21% week over week to 427,000 tonnes.
The city-state of Singapore likely imported fuel oil for the first time ever from Djibouti during the same week, as ship-tracking companies have no record of fuel oil being carried from Djibouti to Singapore.
WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
ASSESSMENTS
| FUEL OIL | ||||
| CASH ($/T) | ASIA CLOSE | CHANGE | PREV CLOSE | RIC |
| Cargo – 0.5% VLSFO | 555.84 | 4.60 | 551.24 | MFO05-SIN |
| Diff – 0.5% VLSFO | 8.25 | 0.50 | 7.75 | MFO05-SIN-DIF |
| Cargo – 180cst | 435.20 | 4.89 | 430.31 | FO180-SIN |
| Diff – 180cst | 0.85 | 0.10 | 0.75 | FO180-SIN-DIF |
| Cargo – 380cst | 431.59 | 3.94 | 427.65 | FO380-SIN |
| Diff – 380cst | 4.40 | 0.05 | 4.35 | FO380-SIN-DIF |
| Bunker (Ex-wharf) Premium – 380cst | 8.50 | -0.50 | 9.00 | |
| Bunker (Ex-wharf) Premium – 0.5% VLSFO | 12.50 | 0.50 | 12.00 |
| For a list of derivatives prices, including margins, please double-click the RICs below. | |
| Brent M1 | BRENTSGMc1 |
| 180cst M1 | FO180SGSWMc1 |
| 180cst M1/M2 | FO180SGSDMc1 |
| 180cst M2 | FO180SGSWMc2 |
| Visco M1 | FOVISSGDFMc1 |
| Visco M2 | FOVISSGDFMc2 |
| 380cst M1 | FO380SGSWMc1 |
| 380cst M1/M2 | FO380SGSDMc1 |
| 380cst M2 | FO380SGSWMc2 |
| Cracks 180-Dubai M1 | FO180SGCKMc1 |
| Cracks 180-Dubai M2 | FO180SGCKMc2 |
| East-West M1 | FOSGEWMc1 |
| East-West M2 | FOSGEWMc2 |
| Barges M1 | HFOFARAAMc1 |
| Barges M1/M2 | HFOFARAASMc1 |
| Barges M2 | HFOFARAAMc2 |
| Crack Barges-Brent M1 | HFOFARAACMc1 |
| Crack Barges-Brent M2 | HFOFARAACMc2 |
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Source: XM
