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2025-12-16 18:07:54
[Supply Game: Why Did the Asian Fuel Oil Rebound End Up Being Short-Lived?] ⑴ The Asian high-sulfur fuel oil (HSFO) market ended its recent brief rebound on Tuesday as spot offers for January delivery softened. ⑵ The spot freight spread for Singapore 380-cst high-sulfur fuel oil was assessed at a discount of over $4 per tonne, widening from the previous day due to some more competitive offers. ⑶ Meanwhile, trading in the very low-sulfur fuel oil (VLSFO) market has been relatively quiet recently, with seasonal factors leading to subdued trading activity. ⑷ The entire Asian fuel oil market remains under pressure from ample inventory, with some sellers still attempting to clear their stocks amid lukewarm demand in both marine fuel and feedstock sectors. ⑸ Crack spreads were largely stable from the previous day. Data showed that the VLSFO crack spread remained stable at a premium of approximately $4.40 per barrel, while the 380-cst high-sulfur fuel oil crack spread rose slightly to a discount of approximately $7.25 per barrel. (6) Industry monitoring agency IIR said on Monday that Kuwait's state-owned Integrated Petroleum Industry Company restarted its 205,000-barrel-per-day crude oil distillation unit at the Al Zour refinery on December 13, nearly a month later than initially expected. (7) On the other hand, geopolitical events continue to disrupt the energy market. Market concerns about potential supply disruptions due to escalating tensions between the US and Venezuela have temporarily outweighed ongoing concerns about oversupply and the potential impact of a Russia-Ukraine peace agreement. (8) Russian state news agency cited anonymous sources on Monday as saying that Russia is considering extending restrictions on diesel and gasoline exports until February next year. (9) Venezuela's state-owned oil company PDVSA said on Monday that it had suffered a cyberattack, but stated that its operations were unaffected, although four sources said its systems remained paralyzed and oil deliveries were suspended. (10) Traders and analysts pointed out that several shipments of Venezuelan oil had already been shipped to China before the US seized tankers off the coast of South America last week. Combined with ample crude oil inventories and weak demand, this will limit the near-term impact of the incident on the Chinese market.
