CEFE Group International is a leading global energy trader and supplier, offering a range of high-quality energy products including crude oil, natural gas, and refined products. With its headquarters located in Dubai, UAE, the company has a strong presence across the globe, including in Europe, North America, Africa, and Asia. CEFE Group International is known for providing exceptional energy solutions such as supply solutions, logistics, and risk management. To learn more about the company and its offerings, visit their website at https://cefegroup.com/energy/.
The energy markets have been volatile in recent times, with supply and demand dynamics playing a crucial role in shaping the prices of different fuel types. In particular, the Asian high-sulphur fuel oil (HSFO) market has witnessed significant fluctuations in recent weeks, with demand picking up and refining margins fluctuating.
Last week, refining margins and spot cash premiums for fuel oil were steady to softer in Asia on Friday, with some key Middle Eastern tenders underway. This resulted in the front-month 380-cst HSFO refining crack (FO380DUBCKMc1) falling to a discount of $20.11 a barrel at Friday’s Asia close (0830 GMT), though it still posted mild weekly gains from the previous week.
- Pakistan Boosting Energy Trade with Russia and Turkmenistan
- Energy Markets in Flux: A Daily Briefing on Oil Futures, Natural Gas Prices, and More
- Oil Markets React to Inventory Build, Inflation Fears, and Geopolitical Tensions
- Indian Firms Turn to Russian Naphtha as Western Nations Impose Price Caps
- Asian HSFO Crack Hits Nine-Week High Amidst Rising Demand
However, this trend seems to have reversed in recent days, as the Asian HSFO crack has hit a nine-week high, indicating stronger demand and tighter supply. This is despite the fact that margins for 0.5% very low sulphur fuel oil have softened on Friday, with the front-month crack (LFO05SGDUBCMc1) at a premium of $13.16 a barrel at the Asia close, according to Refinitiv data.
One reason for the rise in Asian HSFO crack could be attributed to the Kuwait national oil company KPC offering 80,000 tonnes of spot 380-cst high-sulphur fuel oil (HSFO) for loading between Feb. 14 and Feb. 15, in a tender that closed on Friday. The increased demand for HSFO in the Asian market could also be due to rising demand from the shipping industry, which has been grappling with a shortage of containers and a global supply chain crisis in recent months.
Despite the surge in Asian HSFO crack, fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rebounded 1% to 1.18 million tonnes in the week ended Feb. 9, according to the latest data from Dutch consultancy Insights Global. This suggests that the market could be heading towards a supply glut, which could put downward pressure on prices in the near future.
In conclusion, the Asian HSFO crack has hit a nine-week high as demand for the fuel type picks up in the region. The recent surge could be attributed to rising demand from the shipping industry, coupled with a tender from Kuwait’s national oil company KPC. However, the market is not without its challenges, with refining margins and spot cash premiums for fuel oil remaining soft in the region. It remains to be seen how the market will respond to the changing dynamics of supply and demand in the coming weeks.
Disclaimer: The information provided in this blog post is for general informational purposes only. The content is not intended to be a substitute for professional advice and should not be relied upon as such. While we strive to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog post or the information, products, services, or related graphics contained in the post for any purpose. Any reliance you place on such information is therefore strictly at your own risk. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this blog post.