HSFO extends recovery though prompt supply ample

Asia's high sulphur fuel oil (HSFO) market extended its recovery on Wednesday, though ample prompt supply continued to cap gains in spot differentials.

The Singapore 380-cst HSFO cash differential was pegged higher day-on-day at $1.45 a metric ton on Wednesday, with bids holding strength into the later half of October. However, competitively priced offers still weighed on the prompt laycan.

Meanwhile, the very low sulphur fuel oil (VLSFO) market held broadly steady, though expectations of more supply continued to underpin the outlook.

Malaysia's Prefchem sold more low-sulphur straight run (LSSR) fuel oil via its latest tender, according to market sources.

The refiner offered a cargo totalling 540,000 barrels (about 85,000 tons) of LSSR for loading in early October, in a tender that closed on Wednesday, sources said.

This came on top of four cargoes sold for September loading after an issue emerged at one of its residual fluid catalytic cracking (RFCC) units.

Separately, Vietnam's Nghi Son offered 10,000 tons of fuel oil for loading in early October, based on a notice on its website.

Cracks also traded in contrasting directions for key grades. Singapore's 380-cst HSFO crack (FO380BRTCKMc1) for October closed higher at a discount near $3.15 a barrel, while VLSFO crack (LFO05SGBRTCMc1) fell to a premium below $7 a barrel, showed data compiled by LSEG.

INVENTORY DATA

Fujairah heavy fuel inventories (FUJHD04) rose 23% to 6.63 million barrels (1.04 million tons) in the week to September 22, FOIZ data published by S&P Global Commodity Insights showed.

OTHER NEWS

- Oil prices were broadly stable on Wednesday as an industry report showed U.S. crude inventories declined last week, adding to a sense in the market of tightening supplies.

- U.S. oil major Chevron is only able to export about half the crude its joint ventures produce in Venezuela with the latest rules laid out by Washington, three sources close to the matter said.

- Russia's Primorsk port continues to load crude oil two or three days behind schedule after being hit by Ukrainian drones earlier this month, two sources familiar with the matter said and LSEG data showed.

- Talks for Saudi state oil giant Aramco to buy a minority stake in Spanish energy firm Repsol's renewables unit have hit an impasse, two sources familiar with the matter told Reuters.

WINDOW TRADES

- 180-cst HSFO: No trade

- 380-cst HSFO: No trade

- 0.5% VLSFO: No trade

ASSESSMENTS