High sulfur fuel oil (HSFO) prices have continued to decline for the seventh consecutive session, reflecting a bearish sentiment in the market. As supply levels are expected to increase, particularly in Asia, and with rising stock levels in Singapore, the cash premium for Singapore’s 380-cst HSFO fell to $15.02 per metric ton. This downward trend is compounded by a muted trading environment, while the very low sulfur fuel oil (VLSFO) market also exhibited signs of weakness.
In contrast, fuel oil stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub have seen a decrease of 6% to 1.13 million tons, according to data from Insights Global. This drop in European inventories could provide some support to the HSFO market, despite the overall bearish sentiment driven by increasing supplies in Asia. In other news, oil prices experienced an uptick on Friday, marking what is expected to be a second consecutive weekly gain.
This rebound is attributed to new U.S. sanctions on Iran and an updated output plan from the OPEC+ producer group, both of which have heightened expectations of tighter oil supplies moving forward. Additionally, Kazakhstan has reported a record high in oil production for this month as a result of ongoing oilfield expansions. This increase has led to production levels surpassing OPEC+ quotas, according to sources and calculations from Reuters.
Overall, while HSFO prices suffer from a bearish outlook in Asia, the global oil market is responding to geopolitical factors and supply dynamics that may shift the landscape in the coming weeks.