Asia’s 0.5% very low-sulphur fuel oil (VLSFO) gained on Monday as firming utilities and bunkering demand for the fuel weighed on already tightening inventories, trade sources said.
VLSFO output has declined recently as refiners switched to maximising production of higher value refined fuels amid soaring gasoil and gasoline refining margins.
The VLSFO cash premium, front-month time spread and crack all inched higher on Monday.
In the high-sulphur fuel oil (HSFO) market, the front-month time spreads for both 180-cst HSFO and 380-cst HSFO grades climbed higher after steady losses throughout most of October. No VLSFO or HSFO cargo trades were reported in the Singapore trading window.
Overall floating storage inventories for residual fuel in the Malacca Strait slipped to an at least one-year low in the week ended Oct. 27 as inventories of VLSFO and fuels with unspecified sulphur contents dropped, according to data intelligence firm Kpler.
Total floating storage inventories fell by 71,000 tonnes, or 3%, from the previous week to 2.75 million tonnes.
Floating inventories of VLSFO stocks dropped 4%, or 78,000 tonnes, from the previous week to 1.94 million tonnes in the week to Oct. 27. Stocks of residual fuels with unspecified sulphur contents fell by 19,000 tonnes, or 6%, to 301,000 tonnes.
By contrast, stocks of HSFO climbed 5%, or 26,000 tonnes, higher to 508,000 tonnes.
A rare public statement from China that it was releasing gasoline and diesel reserves to boost market supply and stabilise prices pushed international crude benchmarks lower on Monday.
The release of reserves comes as local media reported tight diesel supplies and long lines at gas stations in recent weeks as Chinese refiners cut fuel production due to squeeze in margins.
Separately, China’s top state oil refiner Sinopec Corp plans to increase November and December diesel supplies by nearly 50% each month versus average levels during the first eight months of this year, state television reported on Sunday.
In September and October, Sinopec’s diesel supplies had each risen 20% month-on-month, the report said.
Russian fuel oil exports from the Black Sea port of Tuapse are set to fall by 42% month on month to 270,000 tonnes in November from 480,000 tonnes scheduled for October, traders said on Monday, citing the loading schedule.
The drop was due to refinery maintenance, they said. Rosneft plans to shut its 240,000-barrel per day Tuapse refinery in November and December to carry out major maintenance.
Source: https://www.brecorder.com/Tags: Floating Storage, HSFO, Sinopec Corp, Sulphur, VLSFO