On Wednesday, spot fuel oil benchmarks exhibited a steady to softer trend, with attention focused on diminishing bunker demand concerns stemming from the ongoing global trade conflict. Trade analysts indicated that a slowdown in shipping activity could exacerbate demand from the refueling sector, which has already experienced weaker uptake and reduced premiums for marine fuel since the beginning of the year.
In Singapore, the cash differential for 380-cst high sulphur fuel oil (HSFO) showed a widened discount compared to the previous day, with the market structure shifting into a contango. Similarly, the differential for very low sulphur fuel oil (VLSFO) also declined in response to weaker offers.
Despite these changes, cracks maintained some support as crude prices continued to drop. The VLSFO crack for May closed with premiums nearing $10 per barrel, while the HSFO crack settled at a discount of about 45 cents per barrel.
Overall, trading momentum in the spot market remained thin, consistent with recent trends. In inventory news, Fujairah’s heavy fuel inventories rose by 1.9% to 13.29 million barrels during the week ending April 9, as reported by S&P Global Commodity Insights.
Additional reports indicated that oil prices fell for the fifth consecutive day, reaching their lowest levels since February 2021, influenced by growing demand concerns linked to an intensifying tariff war between the United States and China, which are the world’s two largest economies. Meanwhile, Mitsui O.S.K.
Lines (MOL) of Japan seeks to exploit new trade route opportunities created by the revised tariffs. In operational updates, Venezuela’s state-run oil company PDVSA is restarting a key unit at its El Palito refinery, which had been offline for 11 months, while Reliance Industries in India is conducting maintenance on a crude unit at its refinery for a duration of 21 days.