Asia Fuel Oil-VLSFO downtrend pauses, while HSFO eases slightly
in International Shipping News 26/07/2023
Asia’s spot fuel oil market has started to stabilise in recent sessions, with very-low sulphur fuel oil (VLSFO) holding steady after a recent downtrend, while high sulphur fuel oil (HSFO) has begun to ease after rallying firmer due to strong bidding.
The Hi-5 fuel oil spread, which is the premium of VLSFO over HSFO, widened to $90.25 a metric ton FO05-380SGMc1 at Tuesday’s Asia close (0830 GMT).
The spread had previously declined and remained trapped at its lowest since October 2021, especially after the spot VLSFO market fell into discounts on expectations of higher supplies.
The cash differential for 0.5% VLSFO MFO05-SIN-DIF was pegged at a narrower discount of $1.52 a metric ton on Tuesday, while front-month crack spread LFO05SGDUBCMc1 closed higher day-on-day at a premium of $6.85 a barrel by 0830 GMT.
Meanwhile, 380-cst HSFO cash differential FO380-SIN-DIF slipped to a remium of $10.90 a ton, while product margin FO380DUBCKMc1 eased to a discount of $7.56 a barrel.
In tenders, Taiwan’s Formosa had sold 40,000 tons of main column bottoms for loading from Mailiao in August, sources said.
BUNKER UPDATES
Eastern Pacific Shipping (EPS) and China Power International Development have signed an agreement to collaborate on the production of green energy and renewable fuel solutions, EPS said in a recent statement.
Under the agreement, the companies will focus on developing and adopting cleaner shipping fuels, including green ammonia and green methanol.
OTHER NEWS
– Oil prices were steady on Tuesday, hovering near three-month highs as signs of tighter supplies and pledges by Chinese authorities to shore up the world’s second-biggest economy lifted sentiment, while weaker Western economic data weighed.
– Indonesian state-owned energy company Pertamina has launched sales of gasoline containing 5% of bioethanol made from sugar molasses in two cities, as th country aims to expand the availability of renewable fuels.
– Italy’s Eni will sign a deal with Chevron Corp later on Tuesday to take over the U.S. firm’s stake in the Indonesia Deepwater Development project, the head of Indonesia’s upstream oil and gas regulator said.
– Kazakh oil shipments via Russia, most of which are headed for a Black Sea terminal, continue normally, Kazakh Energy Minister Almasadam Satkaliyev said on Tuesday, despite escalating tensions after the Ukrainian grain deal broke down.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Krishna Chandra Eluri)