Spot fuel oil differentials in Asia saw minor increases on Thursday, while onshore inventories in Singapore continued to decrease. The cash differential for high sulphur fuel oil (HSFO) traded at narrower discounts of $1 per metric ton compared to cargo quotes.
Market sources indicated that despite this, supply remains abundantly available. Conversely, the cash differential for very low sulphur fuel oil (VLSFO) rose slightly, driven by stronger bidding for June loading dates, resulting in premiums above $7 per metric ton.
Recent data revealed that Singapore’s fuel oil stockpiles have dropped to their lowest level in seven weeks, attributed to higher exports and lower imports. Interestingly, Asia continues to receive substantial amounts of high-sulfur fuel oil from the Middle East, despite the decline in local stockpiles.
Additionally, cracks in the fuel market increased on Thursday. June 380-cst HSFO cracks closed at premiums exceeding $2 a barrel, while VLSFO cracks rose to around $12.50 a barrel.
Inventory data shows that Singapore’s onshore fuel oil stockpiles were recorded at 20.54 million barrels (approximately 3.24 million metric tons) for the week ending May 7, reflecting an 8.6% week-on-week decrease, according to Enterprise Singapore. Similarly, Fujairah’s heavy fuel oil inventories fell by 2.6% to 10.46 million barrels (1.65 million tons) for the week ending May 5, based on data from S&P Global Commodity Insights.
In other news, oil prices increased on Thursday amid optimism regarding impending trade discussions between the United States and China, two of the largest oil consumers. Indonesia’s Karimun terminal has also intensified its imports of Russian oil products, positioning itself as a notable transshipment hub.
Meanwhile, Dutch and German refineries have secured all four cargoes of Chadian Doba crude in April to meet the rising demand for cleaner marine fuel in Europe.