Singapore 380 CST HSFO crack slides to more than 2.5-year low on ample supply
6th July 2022 10:03 GMT

The August Singapore 380 CST high sulfur fuel oil swaps crack to Dubai crude swaps slid to more than a 2.5-year low of minus $23.764/b July 5, amid ample supply and stable demand, S&P Global Commodity Insights data showed.

The spread level -- which measures the value of the product to crude oil -- was at its lowest since Dec. 6, 2019, when it touched minus $24.211/b, the data showed.

"There is more supply than demand," a fuel oil trader in Singapore said.

As refining margins for oil products have been strong, regional refiners are running their refineries at maximum capacity, which has increased HSFO supply, fuel oil traders said.

Traders also noted that there has been an increase in the flow of Russian fuel oil barrels to Asia.

According to Kpler shipping data, Singapore and Malaysia received 315,000 mt of HSFO from Russia in June, spiking 75% from May.

Enterprise Singapore data showed that the city-state imported 197,694 mt of fuel oil from Russia in the four weeks ended June 30, while no Russian inflows were recorded in the four weeks ended May 25.

The increase in supply comes amid fairly stable demand in the region, market sources said. There are, however, some summer requirements starting to flow in from Kuwait, which usually imports only over June-August. It bought two 80,000 mt 380 CST HSFO cargoes for July delivery, which is within its typical import volume of two to three cargoes per month during summer, sources added.

Reflecting the ample supply and stable demand, the Platts 380 CST HSFO cash differential to swap values dropped to minus $2.33/mt on July 5, the lowest since June 9, 2021, when it was assessed at minus $2.35/mt, S&P Global data showed.

Platts ,
6th July 2022 10:03 GMT