Asia Fuel Oil: VLSFO’s cash rebate expands
Driven by abundant supply and sluggish demand, Asia’s 0.5% cash differential for ultra-low sulfur fuel oil (VLSFO) fell to its lowest level in more than nine months on Friday, extending losses this week.
The VLSFO cash differential fell to minus $ 2.85 per tonne at Singapore quotes, down from minus $ 2.35 per tonne in the previous session and to over 35 cents per tonne at the start of the month.
Meanwhile, stocks of residual fuel at the Amsterdam-Rotterdam-Antwerp (ARA) and Singapore storage centers fell this week, while those in Fujairah fell, official data showed.
Fuel oil inventories in ARA’s refining and storage fell 4%, or 51,000 tonnes, to a five-month low of 1.21 million tonnes in the week ended May 20, data shows of the Dutch consultancy firm Insights Global (IG).
Compared to last year, stocks at the ARA center were 30% lower and slightly lower than the five-year seasonal average of 1.28 million tonnes.
In Singapore, fuel oil inventories fell 5% to a three-week low at 24.96 million barrels, or 3.93 million tonnes, as net import volumes fell to an all-time low in 2021.
Earlier this month, Singapore fuel oil inventories hit a more than four-year high of 27.23 million barrels, or 4.29 million tonnes.
At the Fujairah hub, fuel oil inventories rose 4% to a two-week high of 13.05 million barrels, or 2.14 million tonnes, despite high exports.
Marine fuel sales volumes at the United Arab Emirates (UAE) refueling and petroleum storage center in Fujairah climbed 7% in April to just over 674,000 cubic meters, according to data from S&P Global Platts .
While April volumes were higher, Fujairah has so far failed to resume bunkering traffic for Qatari vessels, trade sources say since the UAE reopened its points of entry. land, sea and air with Qatar earlier this year.
Qatar, whose fleet of liquefied natural gas (LNG) tankers consumes around 150,000 to 170,000 tonnes of bunkers per month, succeeded in establishing its own bunkering facilities after the UAE and other countries in the region had broke off their relationship with him in mid-2017.
The higher volumes came amid better-than-expected demand during the month, trade sources said.
The share of low sulfur sales, totaling 561,000 cubic meters, to overall bunker volumes was 83% in April, up from 80% in March, according to Reuters calculations.
Sales of 380 cst high sulfur fuel oil (HSFO) fell 10% in April to 113,000 cubic meters, while sales of 380 cst VLSFO jumped 11% to 532,000 cubic meters, the second most never recorded high.