SINGAPORE (Reuters) – Asia’s high sulphur fuel oil (HSFO) market pared back on Monday after rallying higher amid recent volatility, while very low sulphur fuel oil (VLSFO) was rangebound from the previous week.
Prompt intermonth spreads for 380-cst HSFO narrowed to $9 a ton on Monday, after widening to over $10 a ton on Friday, based on data from market sources.
Cracks also retreated amid sell-offs and a stronger crude. The prompt 380-cst HSFO/Brent crack closed lower at a discount near $1.85 a barrel on Monday, after hitting multi-year highs last week, based on LSEG data.
Market sources expect trading to remain choppy for the high-sulphur markets due to uncertain supply factors.
Spot premiums for HSFO inched lower for now, as more competitive offers emerged on Monday. Meanwhile, VLSFO was largely rangebound in thin activity.
The hi-5 fuel oil spread recovered after narrowing to its lowest premium in over five years. Front-month March contract rebounded to above $85 a metric ton on Monday, LSEG data showed.
Meanwhile, India’s HPCL offered more HSFO for loading in February via a tender that closes on Tuesday, based on market sources.
TRUMP TARIFFS
– U.S. President Donald Trump ordered 10% tariffs on Canadian oil and 25% tariffs on Mexican crude. This could offer European and Asian refineries a competitive advantage against their U.S. rivals, analysts and market participants told Reuters.
– The new tariffs imposed by U.S. President Donald Trump on imports from Canada, Mexico, and China are likely to have a limited near-term impact on global oil and gas prices, Goldman Sachs said in a note.
OTHER NEWS
– Oil prices jumped on Monday after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China, raising fears of crude supply disruption from the two biggest suppliers to the U.S., but the prospect of lower fuel demand capped gains. [O/R]
– Ukraine struck energy facilities in southern Russia with dozens of drones on Monday, triggering fires at a major oil refinery and gas processing plant and disrupting flights from the Volga to the Caucasus Mountains, Russian and Ukrainian officials said.
– Austria’s OMV and Abu Dhabi National Oil Company said on Friday they are considering a joint venture to acquire Canada’s Nova Chemicals if its owner, the Abu Dhabi sovereign wealth fund Mubadala, agrees.
– Guyana’s government plans to issue two licenses this year for oil and gas projects, Energy Minister Vickram Bharrat told Parliament.
WINDOW TRADES [O/AS]
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
ASSESSMENTS
FUEL OIL
CASH ($/T) ASIA CLOSE CHANGE PREV CLOSE RIC
Cargo – 0.5% VLSFO 567.24 9.32 557.92
Diff – 0.5% VLSFO 6.25 1.42 4.83
Cargo – 180cst 485.69 -2.75 488.44
Diff – 180cst 6.25 -0.25 6.50
Cargo – 380cst 482.48 -1.29 483.78
Diff – 380cst 8.25 -0.75 9.00
Bunker (Ex-wharf) Premium 10.00 0.00 10.00
– 380cst
Bunker (Ex-wharf) Premium 10.00 0.00 10.00
– 0.5% VLSFO
For a list of derivatives prices, please refer
to ENSWAP/INFO or the RICs below:
180cst M1
180cst M1/M2
380cst M1
380cst M1/M2
0.5% VLSFO M1
0.5% VLSFO M1/M2
Cracks 180cst-Brent M1
Cracks 180cst-Dubai M1
Cracks 380cst-Brent M1
Cracks 380cst-Dubai M1
Cracks 0.5% VLSFO-Brent M1
Cracks 0.5% VLSFO-Dubai M1
Visco 180cst/380cst M1
Hi-5 0.5% VLSFO/380cst M1
GoFo 10PPM/0.5% VLSFO M1
East-West M1
Barges M1
Barges M1/M2
Crack Barges-Brent M1
(Reporting by Jeslyn Lerh; Editing by Vijay Kishore)
