Asia’s high sulphur fuel oil (HSFO) premium remained largely stable on Tuesday, with continuous rangebound trading emerging in the spot market. The 380-cst HSFO cash premium sustained its position above $21 per metric ton concerning cargo quotes, mirroring the previous session. The market’s strength persisted due to bullish bidding, even amid expectations of higher supplies for the month. In contrast, the very low sulphur fuel oil (VLSFO) market displayed bearish characteristics amidst lukewarm demand and ample supply.
Trade sources indicated that the Singapore spot discount widened on Tuesday, accompanied by a decline in spot offers from earlier sessions. Refining margins exhibited volatility, with April VLSFO/Brent crack rising to premiums near $8 per barrel, while 380-cst HSFO cracks closed lower at discounts of approximately $2.20 per barrel, according to data from LSEG. Turning to refinery updates, Shandong Yulong Petrochemical, China’s newest refiner, is expected to begin test operations of its second crude oil processing unit later this month. Meanwhile, Indonesia plans to establish several oil refineries across islands like Kalimantan and Sulawesi, significantly increasing its capacity from an initial single refinery project.
Additionally, the Kirishi oil refinery in northwest Russia has reportedly continued operations despite a drone attack on Saturday. In the U.S., oil refiners are anticipated to have around 1.1 million barrels per day of capacity offline for the week ending March 14, which could raise available refining capacity by 85,000 barrels per day. In other news, oil prices have rebounded slightly during Tuesday’s trading, despite uncertainties related to a potential U.S. recession and the impact of tariffs on global growth. Gunvor’s CEO noted that global oil supply growth is currently outpacing demand.
Additionally, Nigeria’s state oil company NNPC Ltd is in discussions to extend a crude oil supply contract with Dangote Oil Refinery, and Vopak has launched its first bio-bunker fuel supply to a ship from its joint-venture terminal in Fujairah.