HSFO SPOT PREMIUMS DIP BUT BACKWARDATION HOLDS
Spot premiums for high sulphur fuel oil (HSFO) eased further in Asia on Tuesday, although backwardation retained its strength in the prompt trading months.
The March/April backwardation spread for 380-cst HSFO closed at $15.50 per metric ton on Tuesday, widening from the previous session in volatile trade, according to data from trade sources.
Buying momentum was still robust for the spread despite softer premiums in the
spot market in recent sessions, a fuel oil trader said.
Meanwhile, the very low sulphur fuel oil (VLSFO) market has been skewed to the downside lately, but a lack of fresh drivers kept benchmarks rangebound on Tuesday.
Cracks for VLSFO closed at premiums of about $11.40 per barrel, while cracks for 380-cst HSFO closed near discounts of 65 cents a barrel.
Separately, Taiwan’s Formosa offered main column bottoms for loading in March in a recent tender.
OTHER NEWS
– Oil prices extended gains on Tuesday after a drone attack on a pipeline pumping station in Russia reduced flows from Kazakhstan, though gains were capped on the prospects of supply rising soon.
– A senior Russian official said on Tuesday that Ukrainian drones had attacked a pipeline in Russia which pumps about 1% of global crude supply, a strike that he said could disrupt flows to world markets and damage U.S. companies.
– Oil exports from Russia’s Black Sea port of Novorossiisk were revised up by 0.24 million metric tons for February to 2.25 million tons or some 590,000 barrels per day, two people familiar with the matter said.
– Transpetro, a unit of Brazil’s state-run oil company Petrobras, has launched an international tender to contract eight gas tankers and expects to launch 13 others by the end of next year, Chief Executive Sergio Bacci said at an event.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
