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2025-12-12 19:04:50
[High-sulfur fuel oil rebounds alone, year-end liquidity crunch cannot mask structural changes] ⑴ The Asian high-sulfur fuel oil market strengthened this weekend, with firmer buying offers emerging despite the year-end trading slowdown. ⑵ On Friday, the spot price spread for Singapore 380-cst high-sulfur fuel oil widened as the discount of market buying offers relative to cargo prices narrowed, and the discount structure of its near-month futures contract also contracted compared to the previous day. ⑶ However, the market showed structural divergence, with the terminal bunkering market remaining weak, its prices basically in line with cargo prices, while demand for bunkering deliveries this week remained sluggish. ⑷ In contrast, the ultra-low sulfur fuel oil market saw little change amid quiet trading, but the discount structure of its near-month contract also narrowed. ⑸ Regarding crack spreads, both types of oil recorded increases this week. Data from institutions shows that the crack spread for very low sulfur fuel oil closed at a premium of approximately $4.30 per barrel on Friday, while the crack spread for 380-cst high sulfur fuel oil remained at a discount of approximately $8.10 per barrel. (6) Inventory data is putting pressure on prices. Data from a Dutch consulting firm shows that fuel oil inventories in the Amsterdam-Rotterdam-Antwerp region rose 10.5% to 1.13 million tons in the week ending December 11. (7) The current market exhibits typical year-end characteristics, namely, decreased liquidity amplifying price volatility. However, the price spread between high and low sulfur fuel oil products continues to reflect the long-term structural impact of the International Maritime Organization's environmental regulations.
